Suppose you are the regional director for a hotel chain and are trying to determine the success of a marketing campaign using coupons - how might you reduce the uncertainty regarding the campaigns efficacy?

a.Introduce the coupons in all the hotels so there is no differences between hotels and you can measure the performance before and after.

b.Introduce the coupons in half of the hotels and examine the difference in performance before and after and between the control group and the experimental group.

c.Run a natural experiment and measure the difference-in-difference estimate of the change.

d.both b and c

e.All of the above.

You are more likely to experience the "winner's curse" in which type of auction?

a.Common Value - first-price Auction when rivals have better information

b.Common Value - Oral Auctionwhen rivals have the same information

c.Common Value - Second-Price Auction when rivals have the same information

d.Common Value - Vickrey auctionwhen rivals have better information

Suppose that you have 2 buyers and one item for sale. The first buyer values your product at $10, and the second buyer values your product at $6. You estimate that the probability of getting the high value customer is 40%. Your marginal costs are $3. You have only one chance to sell your item to these buyers.What is your optimal price and expected profit?

1. Price at $6, Profit = $1
2. Price at $6, Profit = $3
3. Price at $10, Profit = $2.8
4. Price at $10, Profit = $4