Subject:
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Re: When is "Not an Auction" really an auction?
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Newsgroups:
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lugnet.market.theory
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Date:
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Wed, 1 Dec 1999 23:54:10 GMT
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Viewed:
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304 times
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In lugnet.market.theory, Derick Bulkley writes:
> "big Lego for sale.. ...this is NOT an auction... ...highest offer
> received after..." etc.
>
> This isn't an auction? It sure is the heck isn't a sale for pete's sake!
Are they notifying potential buyers of current offers and using the current
offers to solicit progressively higher bids? If so, then it's an auction
in spirit.
> In fact, the American Heritage Dictionary defines an auction as follows:
>
> auc·tion (ôkshn) n.
> A public sale in which property or items of merchandise are sold to the
> highest bidder.
I think the key word there is "bidder," which, in the context of an actual
auction, carries extra baggage beyond just simly meaning making an "offer
to buy." After all, commodities markets and stock markets have bids (and
arguably therefore bidders) but they're not auctions, and in practice,
property often is sold to the one making the higest offer there.
> and that is exactly what these so-called "highest offer" sales are. In fact,
> it's the worst kind of auction - sealed bid. This kind of sale heavily
> favors the seller by depriving bidders of virtually any information (except
> "you win" or "you lose") and the potential for abuse is enormous.
Ahh, but technically, this is exactly how "For Sale, $xyz OBO" transactions
in classified ads go...only there, the implication is that $xyz is an initial
asking price, and the OBO means that the price could be dropped if necessary.
But it could also (obviously) mean taking higher offers if there are multiple.
If I advertise a Yellow Castle for "$250, OBO" and I get three e-mail offers
all within an hour, and one is for $300, another is for $325, and another is
for $350, I'm going to take the $350 -- hence the OBO part.
Is that an auction? Yes and no. Yes in that it is, technically, very much
like a sealed-bid auction. But sealed-bid auctions aren't really auctions.
--Todd
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Message is in Reply To:
 | | When is "Not an Auction" really an auction?
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| Be warned: serious ranting below. I'm awfully tired of notices posted to marketplace.buy-sell-trade, stating something like: "big Lego for sale.. ...this is NOT an auction... ...highest offer received after..." etc. This isn't an auction? It sure is (...) (25 years ago, 1-Dec-99, to lugnet.market.theory)
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