Reminds me of this old auction site who's name I can't remember (power in numbers or somesuch?) ... I purchased an Amplifier for my Camaro ... This was in like 1996 ... There were multiple available for purchase (like 25 or so) ... the top X bidders won the right to buy, but we all paid the lowest winning bidder's price ... I think I got that amplifier for like $96
Vickrey Auction
51–60 of 68 posts
Re: Vickrey Auction
#52Earlier quoted context omitted.
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?
If you are bidding on a pay per click basis, typically your bid will be adjusted to expected revenue based on the probability someone actually clicks on your ad. For CPM ads this probably doesn't apply.
This is not for open web exchanges, referring more to stuff like adwords, facebook, etc.
Re: Vickrey Auction
#53This 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.
> Which is why I never understand complaints against eBay "snipers", who bid in the last couple seconds of an auction.
If there were only one instance of the thing you wanted, then there would indeed be no reason to complain about snipers. But if there's multiple different auctions, each selling one of the thing you want, you can't bid on a second one until you're outbid on the first one, or you'll risk getting stuck having to buy them both. Snipers thus result in you being "locked out" of the other auctions for way longer than necessary.
Re: Vickrey Auction
#54This 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.
> This means you have to wait until the auction finishes, before you can bid at another auction... It is only worth bidding in the last 30 minutes.
This is definitely true if there's more than one item listed, but it's still got nothing to do with sniping. It's just the fact that eBay auctions usually last for 7 days.
Re: Vickrey Auction
#55This 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.
This is exactly why people need to put their actual max bid (as the parent explained) instead of trying to lowball, then the timing doesn't matter.
Re: Vickrey Auction
#56Earlier quoted context omitted.
Explain it to me like I’m a 5 year old
The winner pays the price that the 2nd highest bid. This means all bidders in the auction have a reason to send an honest bid rather than trying to game the system. The person "selling" in the auction also has an efficient outcome.
Though we should note this only works in the absence of collusion. If a bidder colludes with the seller, then they can increase the amount the highest bidder pays by bidding a very high second-highest bid.
If the bidders collude, they can get a very low price. This is (obviously) true of most auction systems, but for sufficiently public English auctions, bidders that are otherwise uninterested in an item might bid on an item that is going for obviously far below market.
Re: Vickrey Auction
#57The 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…
What's the difference in the example of the embarrassing public auction? In that example, doesn't one of the two bidders leave the auction when the price rises over $4? Leading to the same outcome?
Re: Vickrey Auction
#58The 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…
What's the difference in the example of the embarrassing public auction? In that example, doesn't one of the two bidders leave the auction when the price rises over $4? Leading to the same outcome?
You don't choose to leave in a Vickrey auction, your participation is limited to one bid.
Re: Vickrey Auction
#59The 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…
> 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.
No, in a case like this, you would risk having to fork over 60k, and you would in reality win nothing. The company that bid 100k gets it for 60k, you spend and receive nothing.
Re: Vickrey Auction
#60The 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…
What's the difference in the example of the embarrassing public auction? In that example, doesn't one of the two bidders leave the auction when the price rises over $4? Leading to the same outcome?
That's correct, the price at the end is theoretically the same, but the public doesn't know about the high bidder's price in the second option. The second option (or just a regular auction) just saves you some embarrassment, which is nothing in the end, but in the political world embarrassment is not nothing.
The other benefit (for the seller) mentioned was that bidders get a social signal that other companies think the license is apparently worth the current price, which could pressure the price upwards. Versus Vickrey Auctions where it's a completely blind bid.
If you're curious, if you google "undercover economist vickrey auction uk" you may or may not find a ctrl+f searchable pdf where you can read this section yourself.