[meteorite-list] Steve Arnold's Famous Reverse Auction

From: Michael Farmer <meteoriteguy_at_meteoritecentral.com>
Date: Mon, 28 Apr 2008 20:56:05 -0700 (PDT)
Message-ID: <990615.90731.qm_at_web33105.mail.mud.yahoo.com>

Exactly as I said, confusing, and stupid.
List the item for one cent, let people fight it out. I
often have items sell at or near one cent, so those
buyers reap the rewards, or like last week, people
fought it out to get a couple of my pieces, that went
for many times what I would have sold for, supply and
demand, those who want it bad enough, pay for it.
Michael Farmer



--- Darren Garrison <cynapse at charter.net> wrote:

> On Mon, 28 Apr 2008 23:11:51 -0400, you wrote:
>
> >You might get away with calling it a "Dutch
> Auction" by someone else's
> >definition (wikipedia isn't always right? I dont
> know).
> >
> >I've always thought of a Dutch Auction as being an
> auction where shares
> >of items are available to several people and the
> successful lowest
> >bidder determines the price they all get making
> everyone above him/her
> >very happy as they did not pay their maximum offer.
>
>
> I thought that, too-- but it doesn't seem to be
> strictly true. If you are
> skeptical about trusting wikipedia, how about this?
>
> http://www.answers.com/dutch+auction&r=67
>
> Here's something interesting:
>
>
http://sarahcarey.blogspot.com/2003_06_01_sarahcarey_archive.html
>
> Dutch Auction
>
> Some trivia on this term.
>
> The descending-price auction, commonly known in
> academic literature as the Dutch
> auction, uses an open format rather than a
> sealed-bid method. It is the
> technique used in Netherlands to auction produce and
> flowers (hence, a "Dutch"
> auction). Unfortunately, the financial world has
> chosen to refer to another type
> of auction as the Dutch auction. In the financial
> world, the auction known as
> "Dutch" is what is referred to in the academic world
> as a uniform, second-price
> auction. Great confusion results. In this series of
> articles, the "Dutch"
> auction will mean a descending-bid structure.
> In a Dutch auction, bidding starts at an extremely
> high price and is
> progressively lowered until a buyer claims an item
> by calling "mine", or by
> pressing a button that stops an automatic clock.
> When multiple units are
> auctioned, normally more takers press the button as
> price declines. In other
> words, the first winner takes his prize and pays his
> price and later winners pay
> less. When the goods are exhausted, the bidding is
> over.
>
> Dutch auctions have been used to finance credit in
> Rumania and for foreign
> exchange in Bolivia, Jamaica, Zambia and have also
> been used to sell fish in
> England and in Israel.
>
> Dutch auctions are common in less obvious forms.
> Filene's, a large store in
> Boston, keeps in its basement a variety of
> marked-down goods, each with a price
> and date attached. The price paid at the register is
> the price on the tag minus
> a discount that depends upon how long ago the item
> was tagged. As time passes
> and the item remains unsold, the discount rises from
> 10 to as high as 70
> percent.
>
> It is believed that the English system may be
> inferior to Dutch in one area. The
> key to any successful auction (from the seller's
> point of view) is the effect of
> competition on the potential buyers, and in an
> English auction, the underbidder
> usually forces the bid up by one small step. The
> winner may end up paying well
> under his valuation and thus the seller does not
> receive the maximum price.
>
> However, in the Dutch system, if the bidder with the
> highest interest really
> wants an item, he cannot afford to wait too long to
> enter his bid. That means he
> might bid at or near his highest valuation. (source)
>
>
> and from Amazon...
>
> Dutch Auctions
>
> In Dutch auctions, the seller lists a quantity of
> items for sale--five Barbie
> dolls, for example, or 20 rocks that bear a striking
> resemblance to George
> Washington.
>
> Bidders submit both how many items they wish to buy
> and how much they want to
> bid for each one. The final per-item price in a
> Dutch auction is determined by
> the lowest of the winning bids. The bidder who
> submits the highest of the
> winning bids is entitled to the quantity he or she
> specified, but at the lower
> per-item price. Remaining quantities of the item are
> used to fill other winning
> bids in the order of their bid price. Confused? This
> example should clear things
> up:
>
> Joe and Sue are the individual high bidders in a
> Dutch auction for lamps. Joe
> placed a bid for 30 lamps at $20 each. In a
> subsequent bid, Sue offered to buy
> 10 lamps at $65 each. Because Sue's high bid ($65)
> is greater than Joe's high
> bid ($20), Sue is entitled to all 10 lamps she
> requested at the $20 price (the
> lowest winning bid). Joe is entitled to the
> remaining 20 lamps at $20 each, even
> though his original bid was for a quantity of 30.
>
> There is usually more than one winner in a Dutch
> auction. Winners who are not
> the top bidder may win fewer items than requested in
> their original bids, but
> winning bidders are still bound to purchase the
> smaller number of items.
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Received on Mon 28 Apr 2008 11:56:05 PM PDT