eBay Second Price Auction

Here's an excerpt from a book that details on how eBay actually deviates from the classic Vickrey second price auction format in many many ways:

http://books.google.com/books?id=KF3Hml8-iasC&pg=PA30&lpg=PA30&dq=ebay+second+price+auction&source=bl&ots=QLVv1EK9q9&sig=AWXAJm8Q6wp4UkABq87PlsoH6H8&hl=en&ei=qgEaSu_qD5HMMofe3ZEP&sa=X&oi=book_result&ct=result&resnum=4

Honestly, I think that what eBay has done to the classic Vickrey auction has made its adaptation to the internet successful. For example, differences number 14 and 15 about the seller and bidding having more control over bids work well with the eBay because if a seller does not feel that they have enough control over the auction using eBay, (s)he will not choose eBay as the marketplace to sell his/her product.

Most of these differences between the Vickrey and eBay's auction style make eBay attractive to sellers and bidders alike and therefore allow eBay to rake in a lot of money.

Also, the fact that eBay allows buyers and sellers to send e-mails to each other (differences #10-12) makes eBay attractive to many people because it allows outside agreements to be reached in the case of an auction going bad.

Seller ratings also give buyers some confidence of whether or not the product will be as advertised which is also necessary when transactions like this occur over the internet.

Basically, most or all of these differences exist because of the medium in which eBay operates (the internet) and the fact that eBay wants to make as much money as possible. If eBay ran off pure Vickrey auctions, it probably wouldn't be a popular site and it also wouldn't make as much money.