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The exact form of the auction is really really important though. A Vickery auction is single round and sealed but is critically a second price auction so bidder

by rtkwe 2y ago

The exact form of the auction is really really important though. A Vickery auction is single round and sealed but is critically a second price auction so bidder are incentivized to bid their maximum because they will get the second price which wasn't the case in this auction. Without the second price you're trying to bid just enough to outbid the other party/parties which won't maximize bid size. > Isn't it also meaningless if the person whose estate they're collecting is bidding against them? The blatant attempts to move assets out of InfoWars during the bankruptcy is an entirely different story but that money may technically come legally from outside the estate.

JumpCrisscross 2y ago
> exact form of the auction is really really important though Sure. But nobody uses Vickrey because it's impossible to explain to the public why the highest bid wasn't accepted. > Without the second price you're trying to bid just enough to outbid the other party/parties which won't maximize bid size Which is exactly what happens in any single-round first-price format. The only thing an open auction does is facilitate collusion. Let me repeat: for a single-round first-price auction, sealed bids are the only way to go. > that money may technically come legally from outside the estate It may but it doesn't. Jones saying the judge "ruled in our favour" (emphasis mine) sort of gives away the game.
- jefftk 2y ago
  > nobody uses Vickrey because it's impossible to explain to the public why the highest bid wasn't accepted Google used to use second-price for all their ads, though I think they've stopped: https://support.google.com/adsense/answer/10858748 https://support.google.com/adsense/answer/10858748 (Which I think, sadly, supports your claim around them being confusing)
  - rtkwe 2y ago
    There's a huge one people use all the time without knowing it, eBay is a second price auction too most people just don't use it like one. You can place a huge maximum bid and will only pay the second highest bid plus an increment. It just automatically semi-unseals bids as new bids come in so it looks a lot more like a live outcry auction.
    - jefftk 2y ago
      > eBay is a second price auction too most people just don't use it like one. You can place a huge maximum bid and will only pay the second highest bid plus an increment. It just automatically semi-unseals bids as new bids come in so it looks a lot more like a live outcry auction. This sounds small, but it's a huge difference. Let's I know that some widget is actually extremely valuable, and would be willing to pay up to $1,000. You don't know this, and are willing to pay $80. In a true second-price auction I put in $1000, you put in $80, the bids are unsealed and I pay $80. But with the e-bay system, if I put in $1,000 at the beginning I've partially tipped my hand by bidding it up to $80. You started with some uncertainty about the value of the object, but knowing that I agree it's worth at least $80 pushes you in the direction of thinking it's worth more. This is a major advantage of sniping: by putting your bid in only at the last minute you keep others from reacting to your bid by changing theirs, and so convert the auction into something much closer to a true second-price auction.
      - rtkwe 2y ago
        Yes it different but it does work to increase the bid which is the goal of an auction, discover the best price an item can be sold for in a reasonably constrained time. The fact that it's worse of you as a bidder hoping to get a deal is actually good for it as an auction design. There's also some assumptions built into these analyses that there's at least two people who have a reasonable perception of the value of an item. Things get massively more difficult to analyze when you start including changes in perceived value.
        JumpCrisscross 2y ago
        > fact that it's worse of you as a bidder hoping to get a deal is actually good for it as an auction design The point is, in the above example, you wouldn't bid $1,000. So I will bid $50. Then $60. Then $70. Then $80. Then $90. And then, seeing the price has changed, I will stop. And wait. I am willing to pay $1,000. But it doesn't ever make sense for me to bid that.
        2y ago

by rtkwe 2y ago

JumpCrisscross 2y ago

> exact form of the auction is really really important though Sure. But nobody uses Vickrey because it's impossible to explain to the public why the highest bid wasn't accepted. > Without the second price you're trying to bid just enough to outbid the other party/parties which won't maximize bid size Which is exactly what happens in any single-round first-price format. The only thing an open auction does is facilitate collusion. Let me repeat: for a single-round first-price auction, sealed bids are the only way to go. > that money may technically come legally from outside the estate It may but it doesn't. Jones saying the judge "ruled in our favour" (emphasis mine) sort of gives away the game.

jefftk 2y ago
> nobody uses Vickrey because it's impossible to explain to the public why the highest bid wasn't accepted Google used to use second-price for all their ads, though I think they've stopped: https://support.google.com/adsense/answer/10858748 https://support.google.com/adsense/answer/10858748 (Which I think, sadly, supports your claim around them being confusing)
- rtkwe 2y ago
  There's a huge one people use all the time without knowing it, eBay is a second price auction too most people just don't use it like one. You can place a huge maximum bid and will only pay the second highest bid plus an increment. It just automatically semi-unseals bids as new bids come in so it looks a lot more like a live outcry auction.
  - jefftk 2y ago
    > eBay is a second price auction too most people just don't use it like one. You can place a huge maximum bid and will only pay the second highest bid plus an increment. It just automatically semi-unseals bids as new bids come in so it looks a lot more like a live outcry auction. This sounds small, but it's a huge difference. Let's I know that some widget is actually extremely valuable, and would be willing to pay up to $1,000. You don't know this, and are willing to pay $80. In a true second-price auction I put in $1000, you put in $80, the bids are unsealed and I pay $80. But with the e-bay system, if I put in $1,000 at the beginning I've partially tipped my hand by bidding it up to $80. You started with some uncertainty about the value of the object, but knowing that I agree it's worth at least $80 pushes you in the direction of thinking it's worth more. This is a major advantage of sniping: by putting your bid in only at the last minute you keep others from reacting to your bid by changing theirs, and so convert the auction into something much closer to a true second-price auction.
    - rtkwe 2y ago
      Yes it different but it does work to increase the bid which is the goal of an auction, discover the best price an item can be sold for in a reasonably constrained time. The fact that it's worse of you as a bidder hoping to get a deal is actually good for it as an auction design. There's also some assumptions built into these analyses that there's at least two people who have a reasonable perception of the value of an item. Things get massively more difficult to analyze when you start including changes in perceived value.
      - JumpCrisscross 2y ago
        > fact that it's worse of you as a bidder hoping to get a deal is actually good for it as an auction design The point is, in the above example, you wouldn't bid $1,000. So I will bid $50. Then $60. Then $70. Then $80. Then $90. And then, seeing the price has changed, I will stop. And wait. I am willing to pay $1,000. But it doesn't ever make sense for me to bid that.
        2y ago