On Wed, 20 Dec 2000, Sellam Ismail wrote:
> This argument assumes that the eBay method of auctions has been around
> forever, which it has not. eBay's auction format is something completely
> new, and is completely biased towards the seller.
[...]
Unhhh no. Sorry. Unless a 50 year old auction system counts as
'completely new'.
http://www.britannica.com/seo/w/william-vickrey
Excerpts:
Vickrey, William,
b. June 21, 1914, Victoria, B.C., Can.
d. Oct. 11, 1996, Harrison, N.Y., U.S. in full WILLIAM SPENCER VICKREY
Canadian-born American economist who was credited with innovations in
the analysis of the problems of incomplete, or asymmetrical,
information. He shared the 1996 Nobel Prize for Economics with
James A. Mirrlees of Great Britain.
[...]
In naming him for the 1996 Nobel Prize, the selection committee
specifically cited his novel approach to auctioneering (now known
as a Vickrey auction), which, through sealed bidding, awards the
auctioned item to the highest bidder but at the sum bid by the
second-highest bidder. According to Vickrey, in guaranteeing the lower
price, both buyers and sellers benefit from bids that more accurately
reflect the value of the item.
[...]
> I think they just
> happened to find this out by accident, and have kept it this way because
> it keeps the sellers happy, and the sellers are the ones that make eBay
> rich, so they are certainly not going to change things.
I have no idea if eBay selected Vickrey's model, or duplicated it by
accident, but AFAICT the only difference between theirs and his is that
with eBay, the winner pays one bid increment above the runner up's bid,
instead of exactly the lower bid.
Vickrey developed his auction method at the request of the USG following
WW II when there were *mountains* of military surplus to be disposed of.
Holding 'outcry' auctions was out of the question because of the volume.
Single round sealed bid auctions were considered to be the best possible
method logistically, but up to that time were known to produce low bids
because each bidder was afraid that if he offered his *best* price he
might miss a bargain. (sound familiar?)
Of course Uncle Sugar wanted the best possible price (taxpayer's money,
and all that).
But it's eBay's business for them to grow or kill. Anyone else is welcome
to start a different kind of web based auction.
Is this O/T, or what?
Received on Wed Dec 20 2000 - 22:35:01 GMT