Deal Engines: The Science of Auctions, Stock Markets, and by Robert E. Hall

Deal Engines: The Science of Auctions, Stock Markets, and by Robert E. Hall

By Robert E. Hall

Where and the way digital deal making will flourish and customary pitfalls for marketers and investors.

In Deal Engines, best economist Robert E. corridor explains the underlying ideas of auctions and offers sweeping perception for someone curious to appreciate and take advantage of them. Drawing on many years of analysis that incorporates Nobel Prize-winning discoveries, corridor explains that the way you arrange a industry has much to do with the offers that consequence. relocating from examples as undemanding as buying a automobile to others as complicated because the mechanisms of inventory exchanges, he describes some of the different types of deal engines that may be used to behavior transactions, together with auctions, real-time exchanges, and posted-price revenues engines. corridor analyzes the features of the markets those deal engines provide upward thrust to, with an eye fixed to sensible results, and gives priceless info and suggestions to every body from marketers engaged on a marketing strategy to dealers on eBay. initially released in hardcover less than the name Digital Dealing.

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Extra resources for Deal Engines: The Science of Auctions, Stock Markets, and E-Markets

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One new factor is present in the multiple-item auction-the rule that ties are resolved in favor of the earlier bidder provides an incen­ tive to bid earlier that somewhat counteracts the incentive to bid late to keep information away from rival bidders. 56 Deal Engines Another tool used to make auctions more transparent by inducing experts to reveal their bidding interest is the activity rule. A typical activity rule bars a bidder from lurking on the sidelines until the last minute. For example, in the OffRoad private-equity auction, you have to bid during the main phase of the auction to have the right t o bid i n the con­ cluding phase (going, going, gone), when the Lx pe rt s \Vo u i J winners are determined.

But if you have joined even one Internet auction, you probably know that what I have just said is a fairy tale. Timing is every­ thing. Experienced users of auctions know that there is a big advantage in being the last bidder. They watch the last minute of an auction, hitting the refresh button every few seconds, poised to hit the submit button for their own bids a few seconds before the auction closes. This crowding into the last few seconds is much stronger in eBay, where auctions have fixed closing times, than in Internet auctions with going, going, gone procedures.

The market will determine the best amount of information to disclose in each e-market setting. Attempts to reg­ ulate transparency have often been wrongheaded to date. For Auction Deal Engines example, the Securities and Exchange Commission compels trans­ parency in transactions in stocks for which trading is established, but prohibits transparency in the auctions that determine the ini­ tial trading price of a stock at its IPO. Complete transparency in trading makes it too easy for dealers to find out who is breaking a collusive arrangement among the dealers to worsen the terms under which customers buy and sell stocks.

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