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I think this has the potential to introduce an interesting auction model. People might want to join in, but not at the initial price point. What if everyone pro
by baron816 9y ago
I think this has the potential to introduce an interesting auction model. People might want to join in, but not at the initial price point. What if everyone proposed wanting in on project stated their maximum price point, and the winning application to solve would get the price they bid at for everyone above that level. In other words
customers_offering_prices = [1,1,4,15,30,30,40,80,100,150,175,10000]
winning_applicant_price = 40
winning_applicant_revenue = [40,40,40,40,40,40].sum
The last 6 customers receive the product and they all pay 40. Essentially a modified Vickrey auction. Everyone has an incentive to bid exactly what the product is worth to them.
Edit: >Everyone has an incentive to bid exactly what the product is worth to them.
Actually not true if applicants see the bids. In my example, the the best applicant would want to bid 10000 because that would maximize revenue, but exclude everyone before that. Customers would adjust their bidding as a result. But applicants should know much they can expect to receive if they win so they can bid correctly.
- beaconstudios 9y agosounds like an approximation of a demand curve, which if opened up the developer would give them the option to choose how to segment their market quite nicely.
- bluGill 9y agoIs that fair though? If something is only worth 5 to me and 40 to you, and the cost of development is 45 - neither of us along can afford the feature, but if we put aside out different contributions the total is enough to make both of us happy, or neither of are. Your model both of use get nothing when we both could be happy on a different model.
- s73ver 9y agoYes, it's fair. If you're not willing to pay what's being charged, you don't get the thing.
- CamelCaseName 9y agoIt is equitable, but it is not efficient. At least this is better than a Vickrey auction though, where you would only get paid $5.01 and spend $45 (net loss) rather than see the bids and do nothing. (Or see the bids and lose, but get paid $40 rather than $5.01)