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A Dutch auction is one of several similar types of auctions for buying or selling goods. [1] [2] [3] Most commonly, it means an auction in which the auctioneer begins with a high asking price in the case of selling, and lowers it until some participant accepts the price, or it reaches a predetermined reserve price.
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.
Revenue equivalence is a concept in auction theory that states that given certain conditions, any mechanism that results in the same outcomes (i.e. allocates items to the same bidders) also has the same expected revenue.
Based on an auction system designed by the economist William Vickrey, the OpenIPO auction uses a mathematical model to treat all qualifying bids impartially. It is similar to the model used to auction Treasury bills, notes, and bonds. Just like in a typical auction, the highest bidders win in an OpenIPO auction, but there are important differences.
The Dutch auction is not widely used, except in market orders in stock or currency exchanges, which are functionally identical. [1] Japanese auction is a variation of the Dutch auction with a low initial price that increases over time. As the price rises, participants must either signal intent to continue bidding or drop out of the auction, and ...
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Savvy bidders will avoid the winner's curse by bid shading, or placing a bid that is below their ex ante estimation of the value of the item for sale—but equal to their ex post belief about the value of the item, given that they win the auction. The key point is that winning the auction is bad news about the value of the item for the winner ...
WASHINGTON ― President-elect Donald Trump on Tuesday repeatedly declined to rule out involving the U.S. military to carry out his ambitions for the U.S. to acquire Greenland and the Panama Canal ...