20 Dec
2000
20 Dec
'00
10:45 p.m.
----- Original Message -----
From: "William Fulmor" <wpfulmor(a)dimensional.com>
To: <classiccmp(a)classiccmp.org>
Sent: Wednesday, December 20, 2000 11:35 PM
Subject: Re: Snipe S/W?
On Wed, 20 Dec 2000, Sellam Ismail wrote:
> This argument assumes that the eBay method of auctions
has been around
> forever, which it has not. eBay's auction
format is
something completely
> new, and is completely biased towards the seller.
[...]
In naming him for the 1996 Nobel Prize, the selection
committee
specifically cited his novel approach to
auctioneering
(now known
as a Vickrey auction), which, through sealed
bidding,
awards the
auctioned item to the highest bidder but at the sum
bid
by the
second-highest bidder. According to Vickrey, in
guaranteeing the lower
price, both buyers and sellers benefit from bids
that
more accurately
reflect the value of the item.
I have no idea if eBay selected Vickrey's model,
or
duplicated it by
accident, but AFAICT the only difference between
theirs
and his is that
with eBay, the winner pays one bid increment above the
runner up's bid,
instead of exactly the lower bid.
The ebay auctions are not sealed, which results in higher
bids, and people placing multiple bids. With a sealed bid
auction no one knows the outcome until the envelopes are
opened and the winning amount read. With the Vickery
auction the high bidder doesn't know the price until all the
bids have been read.
Is this O/T, or what?
yup