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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Thu, 2 Dec 1999 08:38:47 GMT
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Viewed:
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367 times
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In lugnet.market.theory, Todd Lehman writes:
> In lugnet.market.theory, Mike Stanley writes:
> > Larry Pieniazek <lar@voyager.net> wrote:
> > > I'm with you. These are auctions.
>
> A sealed-bid auction is a *DEGENERATE CASE* of an auction. They're only
> known as "auctions" because some bozo once upon a time many years ago
> called them auctions.
>
> The spirit of an auction is to solicit bids and use those bids in turn to
> solicit progressively higher bids. You can't have a true auction unless
> bidders can see other bids (or, at least, the current highest bid).
> Otherwise it's no different than an FS/OBO.
I would agree with this for a single-time sale. But for multiple items (like a
securities auction, which is something I've learned a little bit about in the
last year) sealed-bid auctions are perfectly reasonable for some types of
transactions.
The best example of this would be the sealed-bid auction the US Treasury holds
for treasury bonds. The buyers are all experienced professionals and guaranteed
to pay attention. Inspired by this, WR Hambrecht holds sealed-bid auctions to
set prices for the IPOs that they lead offer.
But a sealed-bid auction for something like a single Lego set is pretty silly.
And the temptation by the seller (and the knowledge of this by the bidder) to
play favorites or other games makes it even more suspect.
Seeing other people's bidding builds interest and makes it much harder to miss
the auction. This makes it much more likely that the most efficient price is
reached, which is better for both the buyers and sellers.
- chris
> > > However, the powers that be have
> > > already ruled that single round sealed bid auctions are OK for b-s-t.
> >
> > Really? That's weird - Todd's a really smart guy. How could he be
> > dead wrong on this issue?
>
> But he's not wrong on this issue. :-)
>
> --Todd
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Message has 1 Reply:
 | | Re: When is "Not an Auction" really an auction?
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| (...) The gray gets grayer -- and, if I'm understand you correctly, then -- WOW. So (this is a question) there are types of sales in which each sale in an of itself isn't really an auction (because people aren't competing and counter-bidding), but (...) (25 years ago, 3-Dec-99, to lugnet.market.theory)
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Message is in Reply To:
| | Re: When is "Not an Auction" really an auction?
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| (...) A sealed-bid auction is a *DEGENERATE CASE* of an auction. They're only known as "auctions" because some bozo once upon a time many years ago called them auctions. The spirit of an auction is to solicit bids and use those bids in turn to (...) (25 years ago, 2-Dec-99, to lugnet.market.theory)
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