While auctions have been around since at least 500 B.C. the widespread use and growth of the internet has greatly increased the popularity of this kind of market. EBay alone has about 1.8 Million items up for sale.

You can find anything from 5$ mugs to stock shares being auctioned off on the web. Most of the auctions are the standard "English" auctions where there is a single unit being sold and the highest bidder wins. Several of the other sites, however, are branching out to other kinds of auctions. Amazon.com and eBay, for example, give you the option of choosing a standard auction style as well as a Dutch auction if you are selling more than one unit.

As these auction sites mature, it will be interesting to see if they branch out and offer different kinds of auctions. All of the auctions so far seem to be as simple as possible in order to entice people to participate. However, I suspect as the bidders become more sophisticated, there will be a wider range of auctions offered.

One interesting aspect of the auctions on-line is that they are almost always open - that is, you can see the bids of others. In addition to being a tool for selling, these auctions also seem to be a source of information on the value of various items up for sale. One interesting exception is the upcoming auction of shares in Ravenswood Winery where the bids are sealed.

The theory of auctions, once accounting for uncertainty, risk, and private information can be immensely complex. The economics literature has devoted much time and space and even part of a Nobel Prize to the theory of auctions - both design aspects as well as bidding behavior. The FCC Auction has led to a cottage industry within the field. Some of the more interesting work is happening in the experimental economics field where various designs are tested with live subjects.

See below for some of the interesting links on auctions.

See Also

• 1996 Nobel Prize in Economic Sciences with a section on Vickrey and auctions.
• Auction Sites
• eBay
• Amazon.com - Auctions
• Egghead.com auctions
• OnSale
• Winebid.com
• Traditional Houses
• Christie's
• Sotheby's
• FCC Auction - the web site
• See also Analyzing the Airwaves Auction by McAfee and McMillan.
• Interview with Paul Milgrom of Stanford on the FCC auctions.
• Market Design, Inc. if you're looking for auction consultants.
• US Treasury Security Auctions.
• Ravenswood -
• The Wine (I highly recommend the Zinfandels).
• the IPO stock auction.
• Red Herring story.
• Glossary of Auction Terms from the National Auctioneers Association.
• A Survey of Auctions including types and strategies.

• Miningco.com Online Auctions - from the Online Shopping site.
• Internet Auction List - large directory.
• Online Auctions from Charles Zheng.

Going, going, gone! While auctions have been around since at least 500 B.C. the widespread use and growth of the... | Posted April 5, 1999 03:03 PM by John Irons