Subject:
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Re: The four types of markets (was Re: Reverse (buyer's) auction for train windows and other parts
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Newsgroups:
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lugnet.market.theory
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Date:
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Thu, 5 Aug 1999 01:48:43 GMT
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Viewed:
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802 times
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On Wed, 4 Aug 1999 20:21:28 GMT, "Paul Sinasohn" <bearitone@my-deja.com> wrote:
> As eBay uses Dutch auction, the price still increases; your bid for X dollars
> covers fewer and fewer units as the per-unit bids increase.
>
> I think I have seen the price-descending auction termed a "Yankee Auction" at
> some computer auction sites.
>
> further thoughts to .theory ??
>
> Paul Sinasohn
Not quite, in eBays dutch auction, you specify a quantity and bid. Your bid is
what you are willing to pay PER item. For instance, if there are 25 widgets up
for auction, and you bid $4 for quantity ten, your maximum bid is $40. If there
were two other bidders, one with Q:7, B:$5, and the other with Q:9, B:$6 at
the end of the auction, then the price for each item would be $4, the $6 bidder
gets 9 (and pays $36), the $5 bidder gets 7 (and pays $28) and you would be
offered the remainder (9) for $36. Since you bid for quantity 10, and there
aren't 10 left, you get to bow ut if you like. At this point the seller could
continue down the list, but no one below the low bidder is obligated to buy.
This makes dutch auctions somewhat risky to the seller. The seller may have
items left over. Also, dutch auctions charge a listing fee PER ITEM. So if you
list those 25 widgets for $10 each minimum, you'll pay $0.50 * 25 = $12.50
listing fee. This is part of the reason I recently sold groups of Star Wars
minifigs together rather than dutch.
Rob
+-------------------------------------------+
| Rob Farver - rfarver@rcn.com |
| http://www.farver.com/lego/ |
| http://members.ebay.com/aboutme/rfarver |
+-------------------------------------------+
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