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All the rage on Facebook - English Auctions.

Started by 1Cool,

18 posts in this topic

1Cool

1Cool

Posted
Posted

I seem to see these types of auctions popping up all over the place on the comic pages on Facebook - any thoughts on the pros and cons of this type of auction? It looks like its a great way to quickly move a ton of books but it really depends on there being a large group of people available and actively bidding.

 

Why is this type of auction not made its way onto the forum?

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Ditch Fahrenheit

Ditch Fahrenheit

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

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1Cool

1Cool

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Posted
Could you explain what it is? (shrug)

 

I was hoping someone would explain it to me :cry: It looks like a stream of very short (10 minute or so) auctions. I ended up hopping on one yesterday and won an ok Avengers 196 for $17 but the whole thing was confusing to me. There seems to be at least 2 or 3 threads popping up all the time now.

 

How do you post a link to a Facebook thread?

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1Cool

1Cool

Posted
  • Author
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

You lost me at "It's very simple"

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Doc McCoy

Doc McCoy

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

4029627-what_zpsghzzrogo.jpg

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FineCollector

FineCollector

Posted
Posted
I was hoping someone would explain it to me :cry: It looks like a stream of very short (10 minute or so) auctions.

 

Just imagine how many people would post :frustrated: after missing a good one! It would probably be a mess to keep track of too, can't do seperate threads here like you can there.

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vaillant

vaillant

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

You lost me at "It's very simple"

Right, "simple" for those with a mathematic mind, maybe.

 

Hey, aren’t you a Cool engineer? lol

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Domo Arigato

Domo Arigato

Posted
Posted

 

There are two things to consider when trying to understand these types of auctions:

 

1) Most people are too dumb to even know how to count properly.

 

 

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RockMyAmadeus

RockMyAmadeus

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

lol

 

I took a break from my angry, knicker-twisted rage posting to laugh at this very funny post.

 

:D

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Buzzetta

Buzzetta

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

Please explain this in English.

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entalmighty1

entalmighty1

Posted
Posted
Could you explain what it is? (shrug)

 

It's very simple...

 

Assume that an item is being offered in an English auction with only two risk-neutral bidders, bidders 1 and 2. The seller and bidder j (j=1,2) know that bidder i's valuation of the item is either vil with probability pi or vih with probability 1-pi (i=2,1). Suppose that 0< vil < vih for i=1,2. Assume further that the valuation of the item is independent among bidders (this corresponds to assumption A2, independent-private-values). Also, assume that v1l=v2l=:vl, v1h=v2h=:vh and p1=p2=:P (this corresponds to assumption A3, symmetric information). The payoff function for bidder i (=1,2), is either 0 if he never bids over bidder j (=2,1), or vl-(i's bid), or vh-(i's bid), depending on his/her valuation of the item, if he bids over bidder j (=2,1). Clearly the payoff function in this case is a function of the bids alone and assumption A4 holds (see figure). It seems to be clear that in this case bidders do not bid over their own valuation, and the winner of the auction is the bidder with the highest valuation who calls his/her bid first. The price he/she will pay for the item is equal to the valuation of the other bidder which is equal to the lowest valuation.

 

english_image.png

 

 

pWexNNy.gif

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