Jun 212012
The way a normal auction works:
Bidder A bids $100
Bidder b bids $150
Bidder C bids $200
So, bidder c wins, pays his $200, collects his item. Bidders A and B take their money and go home.
OK.
Has anyone ever hear of an auction like this:
Bidder A bids $100
Bidder b bids $150
Bidder C bids $200
So, bidder c wins, pays his $200, collects his item. Bidder A pays his $100 and goes home empty handed. Bidder B pays his $150 and goes home empty handed.
It’d be an interesting thought experiment… how high would you bid on an item if you knew that you would be charged your high bid whether you won or not? Would this approach bring in a higher total income than the normal approach?