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Aside from the lack of full transparency, are you saying that generalized second-price auctions are not really auctions or that auctions with reserve prices are
by berrow 17y ago
Aside from the lack of full transparency, are you saying that generalized second-price auctions are not really auctions or that auctions with reserve prices are not really auctions?
- patio11 17y agoI'm saying that if the auctioneer can assign prices unrelated to the content of bids received, then yes, that is not an auction. Compare with eBay, a true auction: Single bid at 5 cents, hidden reserve of $1 (eBay): no sale takes place. Single bid at 5 cents, hidden reserve of $1 (Google): no sale takes place. Single bid at 5 cents with maximum bid of $1, hidden reserve of $1 (eBay): no sale takes place. Single bid at 5 cents with maximum bid of $1, hidden reserve of $1 (Google): sale takes place at $1. (I think almost nobody knows this happens.) Two bids of 5 cents and $1 (eBay): the bid of $1 wins. Two bids of 5 cents and $1 (Google): the side who Google says wins, wins, at a price which is somewhere between 0 cents and $1.