Auction Houses Told to Improve Transparency in Reporting Prices
http://www.bloomberg.com/news/articles/2016-10-17/auction-houses-told-to-improve-transparency-in-reporting-prices
This article touches on the issues of auction houses and the undisclosed fees that go along with selling goods. The Department of Consumer Affairs made it a policy to not include extra fees when reporting prices to the public, which is said to “reflects the true price paid by the bidder and promotes greater transparency in the auction process,” and makes it so that the bidders have an “accurate representation” of the true values of an item. The new policy will include the prices of the fixed fees, so bidders will be aware.
The article does not make it clear what kind of auction this is, i.e. ascending, descending, first-price sealed bid, second price sealed bid, which are common types of auctions discussed in class. In ascending and second price sealed bids, this will be more fair since the bidder can actually bid their true values for the highest payoffs. The new policy is in their favor since they can adjust the prices they want to pay based on the prices after the fees. In descending and first-price sealed bids, where it is usually in the buyer’s favor to bid below their true value, they can now do that since previously, with bidding below true value, they would have to pay more than their true value for the good. This new policy benefits all buyers in these types of auctions.