3 ms·

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 constrain

by 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.
- rtkwe 2y ago
  Even in the eBay example you're betting against their being a third party that will attempt to come in with a late bid so the auction closes before you can respond. If you want the item it's still optimal to bid your maximum and allow the second price mechanism to function, if you bid $1000 and there's only one other bid of $80 (and the price increment is $10 or 12.5%) you get the item for $90 either way no matter if you bid that manually or if you placed a maximum bid. That's how a semi-sealed second price auction works (at least as eBay implements it) the next minimum bid is revealed as new bids come in that are responding like it's a live cry out auction. If there are multiple max bids it's just set to the highest second price plus the bid increment and the max bid is still hidden. That's the beauty of the eBay system it works for people to interact in two ways, as a more boring sealed second bid system and as a live cry auction. The biggest point it falls apart is you need a certain number of people to understand the system to act rationally about it. If you only have people treat it like a live cry auction then it defaults to acting like one.
  - JumpCrisscross 2y ago
    > you're betting against their being a third party that will attempt to come in with a late bid so the auction closes before you can respond Yes. It's why people use bots, e.g. [1]. For low-value products, particularly amidst repeat auctions, the incentive to do so is small enough that one can mostly ignore it. For a high-stakes auction, you're just devolving the game into a high-frequency race. > If you only have people treat it like a live cry auction then it defaults to acting like one The point is it really only works as an English auction. The "sealed" bid is for convenience. (It's not really a sealed or even semi-sealed bid, it's just a dumb auto-bidding bot.) Run a major auction with this format and you'd have zero activity until the millisecond before bids were due followed by a mountain of lawsuits. [1] https://www.gixen.com/main/index.php https://www.gixen.com/main/index.php
    - rtkwe 2y ago
      You can use bots or you can bid your true maximum and receive the best price available below it. You can't snipe a true higher still sealed bid not matter how good your bot is. If all the sniping bidder are above the sealed bidders then the auction still functions to discover higher prices just not as efficiently. > this format and you'd have zero activity until the millisecond before bids were due followed by a mountain of lawsuits. Sure but no one does, the eBay model is a compromise to make the bidding structure more familiar to people who don't understand the second price mechanism. Major auctions don't need to make that accommodation, the audience can be relied on to read and think about the auction structure which is unfortunately not an option you can really take for a mass market tool.
      - JumpCrisscross 2y ago
        > can't snipe a true higher still sealed bid not matter how good your bot is Of course you can. You repeatedly enter marginally-higher bids until you crest their limit. The only case where the auction is efficient is if the automatic bidder is the highest and someone else bids up to their maximum. > can't snipe a true higher still sealed bid not matter how good your bot is Correct. But eBay doesn't have sealed bids. You can absolutely snipe an auto-bidder; this is like the first high-speed algorithm that was ever developed in the real markets. > no one does Literally pointed you to an eBay bidding bot. > the eBay model is a compromise to make the bidding structure more familiar to people who don't understand the second price mechanism ...yes. The eBay model is a compromise that works for unsophisticated bidders and low-value auctions. eBay's model is a known-flawed model that does not "discover the best price an item can be sold for in a reasonably constrained time" [1]. [1] https://news.ycombinator.com/item?id=42389361 https://news.ycombinator.com/item?id=42389361

by rtkwe 2y ago

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.

rtkwe 2y ago
Even in the eBay example you're betting against their being a third party that will attempt to come in with a late bid so the auction closes before you can respond. If you want the item it's still optimal to bid your maximum and allow the second price mechanism to function, if you bid $1000 and there's only one other bid of $80 (and the price increment is $10 or 12.5%) you get the item for $90 either way no matter if you bid that manually or if you placed a maximum bid. That's how a semi-sealed second price auction works (at least as eBay implements it) the next minimum bid is revealed as new bids come in that are responding like it's a live cry out auction. If there are multiple max bids it's just set to the highest second price plus the bid increment and the max bid is still hidden. That's the beauty of the eBay system it works for people to interact in two ways, as a more boring sealed second bid system and as a live cry auction. The biggest point it falls apart is you need a certain number of people to understand the system to act rationally about it. If you only have people treat it like a live cry auction then it defaults to acting like one.
- JumpCrisscross 2y ago
  > you're betting against their being a third party that will attempt to come in with a late bid so the auction closes before you can respond Yes. It's why people use bots, e.g. [1]. For low-value products, particularly amidst repeat auctions, the incentive to do so is small enough that one can mostly ignore it. For a high-stakes auction, you're just devolving the game into a high-frequency race. > If you only have people treat it like a live cry auction then it defaults to acting like one The point is it really only works as an English auction. The "sealed" bid is for convenience. (It's not really a sealed or even semi-sealed bid, it's just a dumb auto-bidding bot.) Run a major auction with this format and you'd have zero activity until the millisecond before bids were due followed by a mountain of lawsuits. [1] https://www.gixen.com/main/index.php https://www.gixen.com/main/index.php
  - rtkwe 2y ago
    You can use bots or you can bid your true maximum and receive the best price available below it. You can't snipe a true higher still sealed bid not matter how good your bot is. If all the sniping bidder are above the sealed bidders then the auction still functions to discover higher prices just not as efficiently. > this format and you'd have zero activity until the millisecond before bids were due followed by a mountain of lawsuits. Sure but no one does, the eBay model is a compromise to make the bidding structure more familiar to people who don't understand the second price mechanism. Major auctions don't need to make that accommodation, the audience can be relied on to read and think about the auction structure which is unfortunately not an option you can really take for a mass market tool.
    - JumpCrisscross 2y ago
      > can't snipe a true higher still sealed bid not matter how good your bot is Of course you can. You repeatedly enter marginally-higher bids until you crest their limit. The only case where the auction is efficient is if the automatic bidder is the highest and someone else bids up to their maximum. > can't snipe a true higher still sealed bid not matter how good your bot is Correct. But eBay doesn't have sealed bids. You can absolutely snipe an auto-bidder; this is like the first high-speed algorithm that was ever developed in the real markets. > no one does Literally pointed you to an eBay bidding bot. > the eBay model is a compromise to make the bidding structure more familiar to people who don't understand the second price mechanism ...yes. The eBay model is a compromise that works for unsophisticated bidders and low-value auctions. eBay's model is a known-flawed model that does not "discover the best price an item can be sold for in a reasonably constrained time" [1]. [1] https://news.ycombinator.com/item?id=42389361 https://news.ycombinator.com/item?id=42389361