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The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.
by jusssi 4y ago
The question is, would an open auction be any better? The process will just happen at smaller increments. And you will have ghost bids to prop up the prices.
- WithinReason 4y agoI would use a Vickrey auction: https://en.wikipedia.org/wiki/Vickrey_auction https://en.wikipedia.org/wiki/Vickrey_auction
- __alexs 4y agoI think the issues with Vickrey auctions for houses is that a lot of buyers really have no idea what price they are willing to pay for a particular property. The open price auction format gives them a (weird and easily manipulated hint) at what price might be sensible for a particular home.
- 1-more 4y agoThis is how real time advertisement bidding is done.
- Ekaros 4y agoI think open auction really would be better. Allow full information on bids and participants can drop out when their absolute limit is reached.
- OJFord 4y agoYes it would be better, because you wouldn't pay your bid (for many it seems to just be max affordable) that was potentially the largest by a long shot. And I don't see that ghost bids propping it up would be much of a problem, they'd risk winning? You could require registering names, putting a deposit down perhaps, no real need for it to be anonymous even?
- jejeyyy77 4y agoThis seems intuitive, but it's wrong. As someone who went through the process, I think blind bidding suppresses prices, not inflate them. When you are making a blind bid, the only information you have is the home itself. The ceiling for your bid is on what you think the house is "worth". You are very conscious about "overpaying" because you have no perspective on what other people are offering. In open bidding, you are competing against other offers and the ceiling is basically what you can afford to pay. Can't tell you how many times we lost offers because we didn't want to overpay - when the sold price was revealed we realized we would've paid another $25K on that had we known.
- OJFord 4y agoWell I suppose it depends on bidder mentality, sure, but in that case it's still better - you would have seen & bid the extra $25k and got it (maybe). > In open bidding, you are competing against other offers and the ceiling is basically what you can afford to pay. Well, what someone else can afford (and is willing) to pay. i.e. you never overpay, pretty much by definition. (I think there probably exist 'open' auction system where the highest bid (not second) is paid, but the main ones don't work like that, and nobody's suggesting that as far as I've seen.)
- jejeyyy77 4y agoYeah I 100% agree open bidding is better in that it is a more honest and transparent process. I just don't think it will help with prices.