Subject:
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Re: Mechanics of proxy bidding?
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Newsgroups:
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lugnet.market.theory
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Date:
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Sat, 30 Oct 1999 06:23:22 GMT
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Viewed:
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320 times
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Frank Filz (ffilz@mindspring.com) wrote:
> One thing you need to decide is if a proxy need only meet the bid which
> causes it to be re-submitted, or to beat it by a bid increment if
> possible. It looks like you're planning on the 2nd.
Yep, I should have been more clear about that: I am seeking to emulate the
behavior of the AucZILLA software as closely as possible. So that means
that proxy bidding will usually raise the price above the competing bid,
not just match it.
> The way I would be inclined to handle the situation is to temporarily
> sort the bids by the maximum possible bid (sorting 2nd by time). Then
> you know which bid is going to get bumped. Remember it's amount. Now
> re-sort by current standing bid value (and 2nd by time). Now increase
> all standing bids to the amount your proxy system requires (one bid
> increment if possible, or just equal).
This is a global, single-step solution, in contrast to the local, multi-step
approach that I have been trying to take (and that Todd's software seems to
use). These two approaches are going to have some behavioral differences:
> So in this case (I'm assuming the left hand bids are the proxies) after
> step 1 you have:
>
> C 0.60 0.00
> A 0.80 0.50
> B 1.00 0.50
>
> So you know C's bid will be bumped. Since you are using the proxy must
> beat the bid, the new minimum bid is 0.70 ...
>
> B 1.00 0.70
> A 0.80 0.70
As compared to my example in the original post, this global lock-step
approach raises some of the bids higher than necessary using a local
single-step solution (where one of the bids ends up at 0.60, the other at
0.70). That's not necessarily a problem as long as people understand why
it's happening, but it seems less desirable to me.
> Now what happens if C bids 0.85, which should fail since it isn't one
> bid increment above A's bid, we need to add an extra finagle before
> sorting the new bid into step 1, check if it will be enough to beat the
> lowest proxy. If not, automatically sort it to the bump position,
> continue step 2 and 3 as above. A refinement of step 3 is that the new
> minimum bid price probably should be the same for everyone, so you set
> it to the lower of
>
> 1. equal to the bumped bid or one increment higher than the bumped
> bid
> 2. the lowest proxy bid which will still stand
>
> So now in our example:
>
> Step 1: C 0.85 0.00 -> new min bid: 0.80
> A 0.80 0.70
> B 1.00 0.70
>
> Step 2: B 1.00 0.70
> A 0.80 0.70
>
> Step 3: B 1.00 0.80
> A 0.80 0.80
So C bids 0.85 but A and B hold onto their bids for less (not equal). It
seems like that would make C pretty mad. The rules above for determining
the new minimum bid would have to take this into account and make sure
the new prices are >= the rejected bid.
> One advantage of doing it this way is that if someone has multiple bids,
> you don't put them in a bidding war. Lets say we have 4 equivalent lots
> with the following bids:
>
> Step 0: C 1.80 0.50
> B 2.00 0.50
> B 2.00 0.50
> A 1.50 0.50
>
> D comes along and bids 1.60:
> ...
> Step 3: D 1.60 1.60
> C 1.80 1.60
> B 2.00 1.60
> B 2.00 1.60
>
> Other systems, by initally bumping C's bid because it is the newest,
> would raise C's bid to 1.80 and B's bids to 1.90 (1.80 if you just
> require proxies to match bids).
No, the proxy-driven bidding will never raise the new prices to more than
the required increment over the bid that starts the chain of events. In
the case above the final bids would be a mixture of 1.60 and 1.70 (or
possibly even all 1.60, I think).
> Of course I've probably forgotten some niggling point.
Therein always lies the problem (hence my original post. :) Another thing
your approach would have to take into account is whether some existing bids
(e.g. hard bids) are already above the new minimum bid price - you're not
always going to set all of the bids to the same price.
Thanks for the detailed response!
Steve
--
Barb & Steve Demlow | demlow@visi.com | www.visi.com/~demlow/
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Message has 1 Reply:
 | | Re: Mechanics of proxy bidding?
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| (...) It seems to me that if the assumption of how the proxy works is that a proxy will be raised to exceed any newer bid, then ALL proxy bids should be raised to at least that level, not just whichever proxy bid happens to be the one the step by (...) (25 years ago, 1-Nov-99, to lugnet.market.theory)
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Message is in Reply To:
| | Re: Mechanics of proxy bidding?
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| (...) One thing you need to decide is if a proxy need only meet the bid which causes it to be re-submitted, or to beat it by a bid increment if possible. It looks like you're planning on the 2nd. The way I would be inclined to handle the situation (...) (25 years ago, 28-Oct-99, to lugnet.market.theory)
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