Quote from: smooth on October 22, 2014, 08:38:34 PM

Quote from: rpietila on October 22, 2014, 08:34:29 PM

Quote from: xulescu on October 22, 2014, 08:29:54 PM

Quote from: rpietila on October 22, 2014, 08:02:09 PM

... all winners pay the same amount per lot (the price of the highest non-winning bid).

Emphasizing this important difference from the last auction for clarity.

Might you explain why the difference is important?

It discourages strategic bidding and encourages people to bid what they actually think the gold is worth. Of course, you can't force people to bid that way, just create the incentives.

An example of the difference would be that lets say I think the gold is worth 1 XMR. So I bid 1 XMR for all 10k. No one else thinks it is worth more than 0.5 so that is the highest losing bid. Under the old rules I pay 1 XMR, which penalizes me for bidding my actual belief (I could have bid 0.5 or 0.51 and still won). Under the new rules I pay 0.5, which does not penalize me.

For some references, see

http://www.eecs.harvard.edu/~parkes/cs286r/spring07/papers/myerson.pdf

http://arxiv.org/pdf/0906.1019v1.pdf

Sorry for the hijack, this is the last post I make on the topic.

xulescu

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