From: kelli217@crosswinds.not.invalid
On Mon, 02 Oct 2006 18:05:01 -0400, Mike wrote:
> wrote in message
> news:1159801966.114287.40120@i3g2000cwc.googlegroups.com...
>> One last try. Consider these two auction scenarios; you and I are the
>> only bidders:
>>
>> 1) I bid $10, you bid $500; what price do you pay?
>
> $11, because I had the highest bid.
>
>> 2) I bid $400, you bid $500; what price do you pay?
>
> $401, because I had the highest bid.
>
>> Did your price change (hint - yes)? If your bid didn't change, but your
>> price did, tell me again why you think you set the price
>
> Because I had the highest bid. Because my bid *did* change. In the
> first case my bid was $11, just enough to overcome *your* bid. In the
> second case my bid was $401, again just enough to overcome your bid. If
> someone else comes along and bids $410, my bid will change again to $411
> and I remain in control.
>
> Look, you might as well try to convince me that the loser of the Super
> Bowl determines the winner, and the winning score. You are assigning
> *way* too much significance to the loser in both cases.
>
>> And you can leave out the "that's how *any* auction works" nonsense;
>> try to at least appear to be aware that there many different auction
>> formats. You'd probably have a stroke trying to figure out eBay Dutch
>> auctions, where the *lowest* successful bidder sets the price.
>
> I understand Dutch auctions perfectly. That's why they are called
> "Dutch" and not just an auction. Two *very* different things. In any
> *normal* auction - normal defined as high bid wins - the high bidder
> sets the price. To claim otherwise is just silly.
>
> My bidding $500 says that *I* control the price up to the $500 point.
> It says that if the price doesn't go higher than $500, I win. *I*
> have control up to $500. If it goes over $500, then I lose control and
> someone else gets control and will win.
>
> I simply do not understand why you can't see this. I guess we'll just
> have to agree to disagree.
What's the deal here? Why didn't you pay $500 each time? That's what you
were willing to pay, and it was more than the other bidder.
What's the variable in the equation that makes a $390 difference in what
you, the winner, *actually pay* for the item? Is it you? Your bid was $500
in each case, so that's not a variable, it's a constant.
It doesn't make that much difference to you in the long run, because you
were prepared to spend as much as $500 for the item. But you DIDN'T spend
$500. You spent some unspecified amount less than that. And just exactly
how much less than that is determined, not by your high bid of $500,
(because that's not what you paid, after all), but that you were willing
to continue to bid even just one increment past the second-highest bidder.
If the second-highest bidder chooses to stop at $10, then you pay $11 for
the item. If the second-highest bidder chooses to stop at $400, then you
pay $401. The final price may be set by you, but the driving force behind
that final price is not you; you are no longer driving the price increase
once you have surpassed the second-highest bidder. I mean, if the
second-highest bidder drops out at $10, are you going to keep driving the
price up all by yourself and wind up paying $401? No. You'll stop as soon
as your bid is higher than the bid placed by the second-highest bidder.
And as long as that second-highest bidder keeps bidding against you, your
desire for the item keeps your bid going up. As soon as the other guy
stops bididng against you, you have no more reason to increase the price
beyond that one final increment.
Of course, the fact that you're willing to pay more than the other guy is
always the determining factor in WHO WINS. But not in WHAT THE WINNER
PAYS.
The winner always pays what the second-highest bidder's maximum is, plus
one increment.
--- SoupGate-Win32 v1.05
* Origin: you cannot sedate... all the things you hate (1:229/2)
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