Asked price

Dennis Sorensen is buying land on which he plans to build a cabin. He wants 200 feet in road frontage and a lot 500 feet deep. If the asking price is 9,000 an acre for the land, approximately how much will Dennis pay for his lot ... 

Liquidity involves the ease with which investors can buy or sell securities quickly at close to their perceived true values. Liquidity risk is the risk that the investor (who must trade at short notice) will have to buy/ sell at security at a price above/below its true value. One widely used indicator of liquidity is the size of the spread between the bid price (i.e., the price at which the dealer is willing to buy a security) and the ask price (i.e., the price at which a dealer is willing to sell a security). Other things equal, the wider the bid-ask spread, the greater the liquidity risk. For investors who buy bonds with the intent of holding them nntil maturity, liquidity risk is of secondary importance. 

To establish a framework for supply chain intermediary analysis, we focus on the economic incentives of three types of players suppliers, buyers, and intermediaries. All players are self interested, profit seeking, and risk neutral. In the simplest form, each supplier has an opportunity cost s, each buyer has a willingness to pay level v that could be public or private information depending on the model assumptions. The intermediary offers an asked price w to the supplier and a bid price p to the buyer while creating a non-negative bid-ask spread p — w) to support her operation. The intermediary has the authority to determine whether a particular trade is to take place using control p. Adopting some mechanism T P,p, w), the intermediary optimizes her own profit. 

In bilateral bargaining with complete information (Figure 3.1-(a)), the supplier s opportunity cost is s and the buyer s willingness to pay is V. The intermediary determines if the trade is to take place (/ ) based on the cost information. If so, she collects asked price p from the buyer and pay bid price w to the supplier. The intermediary determines / ,p, w to maximize a certain function subject to individual rationality (see Section... 

Suppose that an intermediary can purchase the goods from the supplier at unit price w and sell it to the buyer at unit price p, while incurring a transaction cost of K. The intermediary posts the bid-asked prices based on a certain criteria. Based on the posted price, the supplier and buyer may choose to trade directly, or through the intermediary. Clearly the intermediated trade will occur if and only if it offers a lower transaction cost, i.e., K [Pg.78]

Step 1. The intermediary makes a binding offer of an asked price p and a bid price w. 

This simple model captures the basic decisions faced by the supplier and the buyer to use direct, or intermediated trade based on the unit price. In the former case, the supplier and the buyer must split the net gain through bilateral bargaining. Suppose the bargaining results in a split a G [0,1], such that the buyer receives a and the supplier receives (1 — a) In order for the intermediary to attract the supplier and the buyer to the intermediated trade, she must offer an asked price p and a bid price w such that... 

By the revelation principle (Section 3.2), it is sufficient to consider an incentive compatible direct mechanism. In other words, regardless of the mechanism constructed by the intermediary, given the equilibrium of the mechanism, we can construct an equivalent incentive compatible direct mechanism, where the buyer and the supplier report their respective valuations to the intermediary, and the intermediary determines if the trade is to take place. If so, she determines the buyer s payment and the suppliers revenue. Otherwise, the players take their outside options in a direct matching market. Let T(/3,p, w) represents the direct revelation mechanism, where /3(s, v) is the probability that the trade will take place, p(s, v) is the expected payment to be made by the buyer to the intermediary (the asked price), and w(s, v) is the expected payment from the intermediary to the supplier (the bid price), where s and v are the valuations given by the supplier and buyer, respectively. As mentioned above, the intermediary is aware of the buyer and the supplier s outside options as random variables characterized by distributions G and F, respectively. Based on this information the intermediary establishes the buyer s virtual willingness to pay follows ... 

Step 1. At any time t during the trading process, the intermediary updates the bid and asked prices based on the number of active buyer and suppliers. Specifically, she raises the bid price at a unit rate if there are more buyers than suppliers she reduces the asked price at a unit rate if there are more suppliers than buyers, i.e.. 

Step 2. The trading process completes at the first time T when the number of buyers equals the number of suppliers, and the bid price is no less than the asked price, i.e.,... 

Step 3. The trades take place. The intermediary collects the bid price p T) from the buyers and pay the asked price w T) to the suppliers. The intermediary keeps the difference m T) p T) — w T)). 

Let B denote the set of buyers and S denote the set of sellers. We allow sellers to submit asks for multiple bundles 5 C with an ask price, mi(5), on each bundle. Similarly, we allow buyers to submit bids for multiple bundles, with a bid price, pi S) on each bundle. LqU e BuS index both buyers and sellers, and let Bi C 2 denote the set of bundles that receive a bid (or ask) from agent i. Finally, variable Xi S) = 1 indicates the bid on bundle S from buyer i is accepted, and yi S) = 1 indicates that the ask on bundle S from seller i is accepted. Given this, we can formulate the market clearing problem as ... 

The implementation complexity of a mechanism considers the complexity of computing the outcome of a mechanism from agent strategies. For example, in a DRM this is the complexity of the problem to compute the outcome from reported agent values. In an indirect mechanism this is the complexity to update the state of the mechanism in response to agent strategies, for example to update the provisional allocation and ask prices in an ascending-price auction. We choose to focus on the issues of implementation complexity in direct mechanisms, which are the mechanisms in which this has received most attention. 

Diamonds from a mine are separated into gem-quality, near-gem-quality and industrial-grade diamonds. The diamonds are then grouped into sizes, big (more than 1 carat), small (between 1 and 0.1 carat) and sand (less than 0.1 carat). Diamonds larger than 15 carats are handled individually. The ultimate purpose of sorting is to estimate an asking price for the rough diamonds. 

For mutual funds, the ask is the net asset value plus any sales charges. Also called asked price, asking price, or offering price. 

Yellow Sheets A daily bulletin from the National Quotation Bureau which provides updated bid and ask prices for over-the-counter corporate bonds along with a list of brokerages that make a market in those bonds. 

---