Search results
Results from the WOW.Com Content Network
Auction theory is a branch of applied economics that deals with how bidders act in auctions and researches how the features of auctions incentivise predictable outcomes. Auction theory is a tool used to inform the design of real-world auctions. Sellers use auction theory to raise higher revenues while allowing buyers to procure at a lower cost.
The terms Vickrey auction and second-price sealed-bid auction are, in this case only, equivalent and used interchangeably. In the case of multiple identical goods, the bidders submit inverse demand curves and pay the opportunity cost. [4] Vickrey auctions are much studied in economic literature but uncommon in practice.
Some exceptions to this definition exist and are described in the section about different types. The branch of economic theory dealing with auction types and participants' behavior in auctions is called auction theory. The open ascending price auction is arguably the most common form of auction and has been used throughout history. [1]
A well-known special case is the Vickrey auction, or the sealed second-bid auction. Here, there is only a single item, and the set contains + possible outcomes: either sell the item to one of the agents, or not to sell it at all. In step 3, the winner agent is paid 0 (since the total value of the others is 0) and the losers receive a payment ...
A classic example is the pair of auction mechanisms: first price auction and second price auction. First-price auction has a variant which is Bayesian-Nash incentive compatible; second-price auction is dominant-strategy-incentive-compatible, which is even stronger than Bayesian-Nash incentive compatible. The two mechanisms fulfill the ...
Insolvent companies where the government is the liquidator (e.g. official receiver) Unowned property; Often goods sold at government auctions will be unreserved, meaning that they will be sold to the highest bidder at the auction. [citation needed] Auctioneers are normally contracted by the different government organisations within their local ...
Get AOL Mail for FREE! Manage your email like never before with travel, photo & document views. Personalize your inbox with themes & tabs. You've Got Mail!
For specific examples, in a first-price sealed-bid auction, labeled I, where the high bidder wins and pays the amount of their bid, we have (,) = (), and in a second-price auction, labeled II, where the high bidder wins and pays the amount of the second-highest bid, we have