Dutch Auction

http://expertvoices.nsdl.org/cornell-info204/2009/02/12/an-online-dutch-auction/

This article talks about a new website auction known as pricefalls.com. While ebay uses the ascending bid method of selling items, pricefalls.com relies on a descending bid auction. Mutch like the dutch flower sellers, the seller picks a high price, a low price, and a time frame and starting at the high price, every so often the price is lowered by a given increment until someone agress to buy the item at this price. There is no clear nash equilibrium for this strategy according to the article and so it is interesting to see what strategies and thoughts people use when bidding in this fashion. Especially because more people become interested in an item the more the price drops. It was an interesting auction type I was previously more or less unfamiliar with.

In an article from Forbes posted last year, they propose a Dutch Action for 700 billion dollars of distressed mortgages. In this model the treasury would announce the the amount and type of security they are purchasing. The sellers would also post the prices they want. The lowest prices posted would be the prices that the distressed would be purchased at. In theory the government would make a profit and the banks would get rid of their toxic debt.

Bailout Auction Far From A Sure Thing