Re:Canada to ban foreigners from buying homes
by Beldin on Thursday April 07, 2022 @03:23PM
(#30949194)
That's not entirely correct.
The theorem says that in Vickrey auctions (sealed bid 2nd price), each bidder's optimal strategy is to bid their actual valuation of the auctioned object.
It doesn't work with open bidding, because then you could bid artificially much as long as the 2nd highest bid was at your real valuation or below.
Re:Canada to ban foreigners from buying homes
by jefftk on Thursday April 07, 2022 @05:01PM
(#30950299)
Sorry, that's not the theorem I'm referencing. See the section "Revenue equivalence of the Vickrey auction and sealed first price auction".
Re:Canada to ban foreigners from buying homes
by bennysomething on Thursday April 07, 2022 @04:52PM
(#30950210)
Is there anything in game theory related to this? (Very naive question, so probably not)
But yes my intuition when selling my house was "surely I'd get more if this was open bids"
There's a theorem an auction design that says that, under some vaguely reasonable assumptions about bidder information, it doesn't matter what form you use for the auction. Open auction, sealed auction, even second price auction should all give the same winner and same final price: https://en.wikipedia.org/wiki/Vickrey_auction#:~:text=Revenu...