The bidders, numbered 1 to 3, have valuations of $12, $14 and $16, respectively.The bidders will compete in auctions as described in parts (a) through (d); in each case, bids can be made in $1 increments at any value from $5 to $25.

(a)Which bidder wins in an open-outcry English auction? Whatarethe final price paid and the profit to the winning bidder?

(b)Which bidder wins asecond-price, sealed-bid auction? Whatarethe final price paid and the profit to the winner bidder? Contrast your answer here with that for part (a). What is the cause of the difference in these two cases?