Subject:
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Re: Proxy ratcheting: How do auction systems work?
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Newsgroups:
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lugnet.market.auction
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Date:
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Wed, 21 Apr 1999 21:47:40 GMT
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Viewed:
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770 times
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In lugnet.market.auction, dbulkley@SeriousCollector.com (Derick Bulkley)
writes:
> Larry,
> I must protest! In designing the system, I wanted first of all to
> allow firm bidding - which is an important signialing tool in an auction.
> But the 'common' rules in proxy-only auctions would have bestowed every
> advantage upon the proxy bid, leaving the firm bid all but impotent.
Hmm, how so? Can you give an example?
> I took it upon myself to
> allow an advantage to the firm bid, via the 'disadvantage' to the proxy
> in case 3.
I think a byproduct of assigning labels to bid types is confusion about
what's really going on.
What's really going on in a "proxy bid" is this: You have a bid range --
an ordered pair (x,y), where x is the declared minimum that you will pay and
y is the declared maximum that you will pay (constraints: 0<=x<=y).
WoLOG, call this ordered pair (x,y) a "bid." A special case of this --
sometimes called a "firm bid" -- is when x=y. Here, the maximum equals the
minimum, or, more subjectively, the minimum equals the maximum.
Note that in both cases the potential outlay that the bidder is responsible
for is y. The only difference between x<y and x=y is that when x<y, the
bidder is hoping that the actual final result r will be x<=r<y.
Some more notation: Let d(x) be the relative requirement to oust a standing
high bid of x (this is the minimum bid increment for x, say x/10 or x/20 or
some table-lookup function). Let b(x,y) be minimum absolute requirement to
oust a standing high bid of x (this is what a competing bidder needs to bid
to oust a high bid). And let e (for epsilon :) be the smallest reasonably
representable monetary quantum (this is typically a penny).
If you define b(x,y) = max(y+e, x+d(x)), then you will, over time, frustrate
many bidders who place high bids such that y+d(y) > b(x,y). And the closer
(b(x,y)-y)/d(y) is to zero, the more you will frustrate them on average.
OTOH, if you define b(x,y) = y+d(y), then you will have a subjectively
fairer and less frustrating system for the bidders.
> Further, the whole sniping issue is moot:
How do you define "sniping"? I define it (loosely) as "the calculated last-
minute theft of a bid from another bidder, often by a ridiculously small
increment."
I think there are two sides to sniping, though: The one side is the last-
minute side -- a by-product of (ptui) fixed-time auctions. The other side
is the ridiculously-small-increment side. If I had a min of $50 and a max
of $100 and someone sneaks in and takes it away from me for $100.01, I'd
feel like I was sniped, in the "gunsights" and "targeted" sense. God help
me if I don't notice it and rebid before the item goes sold. :)
> the beauty of the non-timed
> auction is that it promotes the dissemination of information, by ensuring
> that late information - a last minute bid - is not allowed to determine
> the outcome. Therein lies what I beleive to be the ugliness of timed
> auctions - they discourage bidders from revealing information (how they
> value a given lot) until as late as possible.
Amen to that!
> Don't get me wrong - timed
> auctions are a brilliant method of creating excitement about otherwise
> mundane merchandise - it's just that I abhor the idea that people believe
> it is the only way to run an auction on the internet.
Amen to that!
--Todd
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Message has 1 Reply:
 | | Re: Proxy ratcheting: How do auction systems work?
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| Todd Lehman wrote in message ... :>Therein lies what I beleive to be the ugliness of timed :> auctions - they discourage bidders from revealing information (how they :> value a given lot) until as late as possible. : :Amen to that! : : :> Don't get (...) (25 years ago, 23-Apr-99, to lugnet.market.auction)
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Message is in Reply To:
| | Re: Proxy ratcheting: How do auction systems work?
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| Larry, I must protest! In designing the system, I wanted first of all to allow firm bidding - which is an important signialing tool in an auction. But the 'common' rules in proxy-only auctions would have bestowed every advantage upon the proxy bid, (...) (25 years ago, 21-Apr-99, to lugnet.market.auction)
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