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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Thu, 22 Apr 1999 18:20:39 GMT
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Viewed:
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845 times
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On Thu, 22 Apr 1999 01:06:42 GMT, "Derick Bulkley"
<dbulkley@SeriousCollector.com> wrote:
> Point well taken, Larry. What about the seller though? It's the *seller*
> that pays the bills...
>
> If A's proxy bid is $1000, and the increment is 10%, and B submits a bid of
> $1075, then under the proposed method, A wins, get ratcheted up to $1000, and
> the next bid is $1100.
>
> Now assume A goes unchallenged and the auction ends.
>
> The seller has now 'lost' $75 in value that another buyer would have been
> willing to pay - essentially subsidizing A.
But now you're not talking about having to beat the proxy by the increment,
you're talking about bidders being unwilling to go to the next increment
level. That's a different problem, and happens in every single auction --
they end when no one is willing to bid any higher.
> Note also, that if A had placed a
> Firm bid, then B WOULD have needed to bid $1100 just to qualify...
Being able to stake a claim based on large required increments is not a
good thing, IMO.
Steve
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