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The effort fundamentally conflicted with auction dynamics. The DAO had a hard cap on the price they could bid, and the hard cap was publicly known. As interesti

The effort fundamentally conflicted with auction dynamics. The DAO had a hard cap on the price they could bid, and the hard cap was publicly known. As interesting as the idea was, it was never going to be successful.

gruez 5y ago
Was it a sealed bid auction or something? If it was open bid auction, then knowing the hard cap isn't really an impediment to them winning the bid. If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win. The worse that could happen is them paying more than they needed to, by the seller pumping up the price with shill bids.
- _jal 5y ago
  >If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win. You're claiming there's no advantage to knowing your opponent's max bid? I wish all my eBay competitors agreed with you.
  - gruez 5y ago
    >You're claiming there's no advantage to knowing your opponent's max bid? If there is, why don't you state what it is, rather than asking me?
    - _jal 5y ago
      If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose. Especially in auctions with multiple known bidders, collusion opportunities can arise to allow bidders to control the price, too. Look at GSA natural resource auctions for examples.
      - gruez 5y ago
        >If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose. But don't you have a limited budget? If your budget is $40M, and you know that the DAO is going to bid all the way up to $50M, how does that help you? You will still lose the bid. Conversely, if your budget is $50M, and you know that the DAO will only bid to $40M, how does that help you? During open bidding (ie. non-sealed bid), the bids go up incrementally, so after the DAO placed its bid, all you need to do is increase your bid by the minimum increment and you'll win. Using the strategy of "increment the minimum amount until you reach your budget" gets the same result.
        captn3m0 5y ago
        "Whatever is in my power" can mean lots of things. If you were short by $1M, you could probably convince someone to loan you that amount quite easily. The GP already mentioned colluding - you could for eg, merge funds with another potential bidder (or donor) to "just cross the amount" in exchange for something (say a yearly showing of the constitution at a museum of their choice) Knowing your opponents maximum amount makes your riskier bets (loaning money, striking deals) much less risky - atleast in a two-way auction(?)
thedudeabides5 5y ago
That's just not true. If the second highest bidder could only go to $20, then anything above $20 would be fine. It's the fact that the second bidder was willing to go above $48 that killed then. This is pretty classic "Dutch Auction" dynamics, where the winning bidder gets the item at the reserve/max price of the second highest bidder. https://en.wikipedia.org/wiki/Dutch_auction https://en.wikipedia.org/wiki/Dutch_auction

gruez 5y ago

Was it a sealed bid auction or something? If it was open bid auction, then knowing the hard cap isn't really an impediment to them winning the bid. If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win. The worse that could happen is them paying more than they needed to, by the seller pumping up the price with shill bids.

_jal 5y ago
>If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win. You're claiming there's no advantage to knowing your opponent's max bid? I wish all my eBay competitors agreed with you.
- gruez 5y ago
  >You're claiming there's no advantage to knowing your opponent's max bid? If there is, why don't you state what it is, rather than asking me?
  - _jal 5y ago
    If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose. Especially in auctions with multiple known bidders, collusion opportunities can arise to allow bidders to control the price, too. Look at GSA natural resource auctions for examples.
    - gruez 5y ago
      >If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose. But don't you have a limited budget? If your budget is $40M, and you know that the DAO is going to bid all the way up to $50M, how does that help you? You will still lose the bid. Conversely, if your budget is $50M, and you know that the DAO will only bid to $40M, how does that help you? During open bidding (ie. non-sealed bid), the bids go up incrementally, so after the DAO placed its bid, all you need to do is increase your bid by the minimum increment and you'll win. Using the strategy of "increment the minimum amount until you reach your budget" gets the same result.
      - captn3m0 5y ago
        "Whatever is in my power" can mean lots of things. If you were short by $1M, you could probably convince someone to loan you that amount quite easily. The GP already mentioned colluding - you could for eg, merge funds with another potential bidder (or donor) to "just cross the amount" in exchange for something (say a yearly showing of the constitution at a museum of their choice) Knowing your opponents maximum amount makes your riskier bets (loaning money, striking deals) much less risky - atleast in a two-way auction(?)

thedudeabides5 5y ago

That's just not true. If the second highest bidder could only go to $20, then anything above $20 would be fine. It's the fact that the second bidder was willing to go above $48 that killed then. This is pretty classic "Dutch Auction" dynamics, where the winning bidder gets the item at the reserve/max price of the second highest bidder. https://en.wikipedia.org/wiki/Dutch_auction https://en.wikipedia.org/wiki/Dutch_auction