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There is an idea related to this: an English auction is the familiar auction where the bidders submit increasing bids, until no one will bid higher. An alternative is a sealed bid second auction: everyone submits a sealed bid, the [View full text and thread]
In the auction literature that I know of, time saving is not a major concern becasue the model usually assume discount rate equals one. In such kind of setting, the scheme you have propose does not change any thing, i.e. the buyers will [View full text and thread]
| 04/12/2000 05:31 AM by Martin; multiple blind bids |
When buying something like a house it's usual to make a bid below the asking price, which is then rejected but the price is reduced a little, whereupon a higher bid is made until (maybe) the parties agree somewhere in the middle. This takes a lot of time. Has a process been tried where the bidder puts say 3 bids in 3 sealed envelopes, each higher than the previous, and the seller puts 3 prices, each lower than the previous, into 3 envelopes. A trusted third party could open envelope 1 from each party - if they match, the sale is agreed, if not, both second envelopes are opened - if they match, the sale is agreed, if not, both third envelopes are opened. If at any point the values were say within 1% the sale would be at the midpoint. Has this been tried in practice? What would be a good strategy?
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