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Vickrey Auction

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Re: Vickrey Auction

#41

Post by whimsicalism »

VHRanger wrote: post #37
whimsicalism wrote: post #28

Earlier quoted context omitted.

Do advertisers even control their bid in the auction? In my experience, not fully.

My job is to write algos that optimize the bid on behalf of clients. Most pay per click ad platforms have an API that let you set the bid.

I also work in this field,

> Most pay per click ad platforms have an API that let you set the bid.

even when you are let to set the bid, usually the auction is not conducted just based on your bid but also adjustments from the probability that you will actually pay out

Re: Vickrey Auction

#42

Post by donmcronald »

tasuki wrote: post #2

The Handshake [0] project used (uses?) Vickrey auction to auction off the initial supply of names. It had some other cool ideas, such as replacing certificate authorities with self-signed certificates verified by the blockchain. I know everyone hates blockchain, I kind of do too, but Handshake I found genuinely interesting. Disclaimer, I own some Handshake names so you could say I'm shilling for it but mostly the pro…

I almost bought a Handshake domain, but didn't because of the Vickery auction they use. I wanted to register one that matches my best .com. It's not an in demand name, so it's available, but the last thing I want when I'm buying a domain is a big announcement and a bidding war.

Hey look at me! I'm trying to buy a domain over here! Come compete with me!

It has no value to anyone except me and anyone that can usurp it and try to sell it to me. I don't want to compete with a bunch of crypto bros that have tons of paper money (aka coins) in a low liquidity system, so I opted not to bother.

Now I'm glad I didn't bother. It would have been a huge hassle just to get HNS (?) and now there are tons of blockchain TLD startups. With the collisions that creates they're basically recreating the namespace fragmentation and ambiguity that results from every platform having independent handles.

Re: Vickrey Auction

#43

Post by traek »

crazygringo wrote: post #36
koube wrote: post #20

The Undercover Economist book mentions these. They're honest but they're publicly embarrassing for governments in auctions with few bidders, because sometimes there would only be two bidders, one bidding $100k and one bidding $4, so people were wondering why the winner who was bidding $100k was only paying $4 for a license. [0] The book goes on to describe the UK 3G Telecom license auction[1] and explain how it went…

If these auctions were common, it seems like it would be a ripe opportunity for arbitrage. In a case like this if you thought the market value was $100k, someone with no interest in the license should go ahead and bid something like $60k anyways. If everybody else placed silly bids like $4 "just in case nobody else bids for real", you'll win and resell it and walk away with $40k profit. Of course this assumes there i…

A key property of a Vickrey auction is that it is incentive compatible, i.e. that it isn't possible to achieve a better expected outcome by bidding something other than your true valuation.

Your example relies on the telecom company (or any secondary buyer) not bidding in the auction or bidding only $4. A strictly dominant strategy for the telecom company would be to bid $100k in the auction, winning it for $60k (the second-highest price).

Re: Vickrey Auction

#44

Post by bombcar »

crazygringo wrote: post #38

This is basically how eBay works for auctions. A pair of headphones is currently bid up to $55, you place a max bid of $100, and at the end, if the final max bid among every else is $80, then you win them for $81. Which is why I never understand complaints against eBay "snipers", who bid in the last couple seconds of an auction. If you put in your actual honest max bid, the timing simply doesn't matter.

People complaining about snipers are complaining about not being able to snipe - because they could just put in their max bid. They want the second bidder to go away.

Re: Vickrey Auction

#45

Post by soared »

skimdesk wrote: post #26

Facebook's ad platform famously uses the Vickrey–Clarke–Groves auction [0]. In theory it rewards advertisers for bidding for ads using their true valuation, or rather, the lifetime value of a customer. In practice, it's a lot more convoluted, but the basic principle is fascinating. [0]: https://en.m.wikipedia.org/wiki/Vickrey%E2%80%93Clarke%E2%80...

All of programmatic was vickrey up until a few years ago when everyone switched to traditional first price auctions. I miss those days - it was easy to bid outrageous prices ($100 cpms) but still pay a reasonable amount. Now you need deep/machine learning to evaluate each bid value, and then another algo to predict how much you can shave off that bid and still win the auction.

Re: Vickrey Auction

#47

Post by imtringued »

crazygringo wrote: post #38

This is basically how eBay works for auctions. A pair of headphones is currently bid up to $55, you place a max bid of $100, and at the end, if the final max bid among every else is $80, then you win them for $81. Which is why I never understand complaints against eBay "snipers", who bid in the last couple seconds of an auction. If you put in your actual honest max bid, the timing simply doesn't matter.

People complain about snipers because they only know if they lose the auction at the last minute.

This means you have to wait until the auction finishes, before you can bid at another auction. Constantly failing auctions because of some hidden bidder means you are wasting your time. It is only worth bidding in the last 30 minutes.

Re: Vickrey Auction

#48

Post by soared »

whimsicalism wrote: post #41
VHRanger wrote: post #37

Earlier quoted context omitted.

My job is to write algos that optimize the bid on behalf of clients. Most pay per click ad platforms have an API that let you set the bid.

I also work in this field, > Most pay per click ad platforms have an API that let you set the bid. even when you are let to set the bid, usually the auction is not conducted just based on your bid but also adjustments from the probability that you will actually pay out

I’ve been a buyer for 8 years are so on ttd and another dsp but haven’t heard of the probably of paying out thing - can you share more info on that?

Re: Vickrey Auction

#49

Post by soared »

cldellow wrote: post #10
oldsklgdfth wrote: post #3

As a tangent, I've heard the Google and others are moving away from second price auctions. Does anyone have more info on this topic?

I worked for several years in the ad tech space. Display ads on the open web are...something else. IMO, second price auctions don't work well in the online ad world. In the real world, you know: (1) all bids are submitted before being reviewed (2) the highest bidder is actually going to pay the second price, and there's some friction in the form of a buyer's premium that makes it cost inefficient to immediately resel…

I’m not supply side, but I thought they could just a floor price? Or is that only for pmps?

Re: Vickrey Auction

#50

Post by tasuki »

donmcronald wrote: post #42
tasuki wrote: post #2

The Handshake [0] project used (uses?) Vickrey auction to auction off the initial supply of names. It had some other cool ideas, such as replacing certificate authorities with self-signed certificates verified by the blockchain. I know everyone hates blockchain, I kind of do too, but Handshake I found genuinely interesting. Disclaimer, I own some Handshake names so you could say I'm shilling for it but mostly the pro…

I almost bought a Handshake domain, but didn't because of the Vickery auction they use. I wanted to register one that matches my best .com. It's not an in demand name, so it's available, but the last thing I want when I'm buying a domain is a big announcement and a bidding war. Hey look at me! I'm trying to buy a domain over here! Come compete with me! It has no value to anyone except me and anyone that can usurp it…

I completely empathise with your situation.

Last time I checked (not very recently), all the other blockchain domain systems were worse than Handshake. Doesn't mean they won't win...

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