Bidding

History

The biddings are rare mechanisms of resource allocation of which the use goes back to antiquity. It is generally recognized that the history of the biddings began towards 500AVJC with the market from the marriage from Babylon. In these writings, Hérodote describes biddings at the first price during which the hand of the young women was granted to highest offerer. In the contemporary companies, the mechanisms of auction were traditionally used for the products of agriculture and the breeding. In parallel, the objects for which it is difficult to estimate the production costs and those for which the costs do not reflect the value are the subject also of auctions (as it is the case for the objects and works of art). More recently, the biddings became a mode of purchase and sale more and more rependu. Thus the auctions relate to goods or services increasingly complex like oil concessions, licenses of mobile telephony or of the radio frequencies and goods having an increasingly large value. Finally, Internet made it possible to make more accessible this mode from purchase and to extend considerably the diversity of the products put on sale. Like example, the site Ebay allows the users registered to sell or buy goods of a great diversity, which they are new or worn.

Various types of bidding

There exists from now on a very great diversity of the products “bidding” available. One can today count of it more than one score, different. Interpreted in its broad direction, the term “bidding” indicates any structured mechanism of competition aiming at determining which obtains the article concerned, and often at which price by leading the purchasers to reveal, directly or by offer successive, their price of reservation for this article. One speaks about a couple regulates allowance - rule of payment. If the double mechanisms of bidding are included (where the two sides of the market are in competition), all the stockmarkets become blow indicated by this term. According to the strategies of the applicants, and the nature of the information which it is a question of revealing, the various formats of bidding have variable performances. However, there exist theoretically only 4 different formats of bidding on the bottom:

Bidding under sealed fold/sealed at the first price

Each encherissor gives a bidding (offers) independently of the others under envelope or electronically with the appraiser which examines all the offers. The object is allotted to highest offerer, which pays its amount proposed. It is a process " statique" since it comprises only one turn. Displeased, one of the characteristics of this type of bidding is that the encherissor does not receive any signal (offers) on behalf of the other enchérisseurs. It is the traditional process used at the time of the invitations to tender d' for the Government contracts inter alia or for the mineral rights and of drilling in the grounds of the State.

Bidding under sealed fold/sealed at the second price - bidding philatelist - bidding of Vickrey

Even procedure, the object is allocated to highest offerer, which pays the bid price by the second best encherissor. It is there too about a process " statique" with a turn without emission of signal on behalf of the enchérisseurs. The Vickrey system leads the actors to propose their fair price for the object concerned. Although frequently associated with Vickrey, this type of bidding is used for the sale of stamps of collection to the the United States since the XIXe scècle. This system is also used by Google in the sale of its ad spaces on its page of research.

the ascending bidding (or English bidding)

The English bidding is certainly most popular and common to all: the appraiser starts with a price of reserve, each interested party consequently offers successively a higher price, while respecting a higher bid minimum (also called minimal increment). The process of elimination stops when it does not remain any more in string but one candidate. The good is allotted to the candidate “highest offerer” is at the price that this last to propose " with the first prix" , that is to say at a delivery price equal to the highest offer among those of the eliminated candidates, called " second prix" (Japanese version). This last case is thus strategically similar to that of a bidding closed at the second price. The ascending bidding is the process running in the auction-rooms.

the downward bidding (or Dutch bidding)

The auctioneer announces a starting price higher than the maximum offer of all the candidates, then the undercrust by stages, until a candidate declares taking. The good is then allotted to this candidate “highest offerer”, at a delivery price equal to its offer, called “first price” (the offers of the other candidates remain, in this procedure, unknown factors). This type of bidding returns the procedure of very fast allowance, this is why it is used for the sale of perishable goods. This is why, for example, it is used with the Netherlands for the sale of cheeses and the cut flowers and with the Japan on the fish markets. The downward bidding is, from a strategic point of view, equivalent to the bidding closed at the first price since a encherissor will base himself on his initial evaluation of the amount to which it wishes to acquire to give his bidding (offers) as it is the case in the bidding closed at the first price.

the bidding of the type all pay

In this type of bidding, the whole of the candidates must pay their offer but only the participant having given the best offer gains the bidding.

Widespread formats

Reverse auction

Method of negotiation very much used on the places on the market. It is the purchaser who takes the initiative by putting on line the details of his schedule of conditions. The interested suppliers then have a time limited to make proposals for tariffs. Each supplier, registered voter with the bidding, can take note of the offers carried out by his competitors, those remaining anonymous. It is a " application; inversée" traditional English bidding. In the reverse auction, the various supplier-salesmen make downward offers - simultaneously with the English bidding where the customer-purchasers raise the prices. These reverse auctions are sometimes used for positions of power. Indeed, a company proposes a work and into fixed maximum remuneration. On the basis of this one, the various candidates will raise with the fall and that which proposes finally least low wages “gains” the station.

Bidding on Internet

Some trader sites propose to the private individuals to put at the biddings articles on a Web site Internet. In this case, it is about an application of the Enchère of Vickrey where the winner pays actually the suggested price by the second (except for a delta).

Bidding with the dial

Bidding anglo-Dutchwoman (Klemperer 2002)

Economic theory of the biddings

When a person wishes to buy or sell a good or a service by a mechanism of bidding, she wishes to maximize the profit which she will withdraw from this auction. One can consequently put the question to know which mechanism of bidding makes it possible to maximize this profit or to ensure the allocative effectiveness. However, the intuition alone does not make it possible to answer this question and it is consequently necessary to carry out a formal analysis of the mechanisms of bidding passing by their formalization. This step of formalization is relatively recent. It is Friedman into 1955 which publishes the first major conceptual study dedicated to the biddings. According to this one, the strategy of the enchérisseurs is based on a strategy of definite “setting” which makes it possible to maximize its hope of profit taking into account the value that it grants to the good put on sale. However, the range of this first study is limited because it supposes that the other enchérisseurs do not work out strategy and that their current behavior is determined by their last behavior. The Game theory makes it possible to exceed these limits and to take into account the strategic behavior of the actors and the individual interactions between strategy. Developed in the Forties and applied for the first time to the theory of the biddings by Vickrey in 1961, the game theory makes it possible to describe the bidding like a play and then to analyze the behavior of the participants. One is consequently able to identify a strategic balance of the play which determines the optimal strategy for each player being given the strategies of the other players.

The Marcus decree

Claude-Gerard Marcus, deputy and mayor of Xe district of Paris, in addition commercial of old tables, proposed that the denominations of the objects proposed with the biddings is regulated, for reasons various it was not a law but a decree known under the name of Marcus decree which codified the mentions: Publication with the JORF of March 20th, 1981

Decree n°81-255 of March 3rd, 1981

Decree on the repression of the frauds as regards transactions of and object works of art of collection Version consolidated at July 21st, 2001 - initial version OJ

Article 1 Modified by Decree n°2001-650 of July 19th, 2001 Article 69 (JORF July 21st, 2001 in force on October 1st, 2001).

The usual or occasional salesmen of or object works of art of collection or their agents, public or ministerial officer and competent person proceeding to a public sale with the biddings must, if the purchaser asks it, deliver an invoice to him, receipts, form of sale or extract of the official report of the public sale containing the specifications which they will have advanced as for nature, the composition, the origin and the seniority of the sold thing.

Article 2 the denomination of a work or an object, when it only and immediately is followed reference to one historical period, one century or a time, guarantees the purchaser whom this work or object was actually produced during the base period. When one or more parts of work or object are of posterior manufacture, the purchaser must be informed about it.

Article 3 Unless it is not accompanied by a reserve express on the authenticity, the indication which a work or an object carries the signature or the stamp of an artist involves the guarantee that the artist mentioned is indeed the author. The same effect sticks to the use of the " term; par" or " de" followed author nomination. The same applies when the name of the artist is immediately followed designation or title of work.

Article 4 use of the " term; allotted à" followed by a name of artist guarantees that work or the object was carried out for the period of manufacture of the artist mentioned and that serious presumptions indicate this one like the probable author.

Article 5 use of the " terms; workshop de" followed by a name of artist guarantees that work was carried out in the workshop of the quoted Master or under his direction. The mention of a workshop is obligatorily followed of an indication of time in the case of a family workshop having preserved the same name on several generations.

Article 6 use of the " terms; school de" followed by a name of artist the guarantee involves that the author of work was the pupil of the quoted Master, manifestly was subject to its influence or profited from its technique. These terms can apply only to one work carried out of living of the artist or within a time lower than fifty years after its death. When it refers to a precise place, use of the " term; school de" guarantees that work was carried out throughout existence of the indicated artistic movement, of which the time must be specified and by an artist having taken part in this movement.

Article 7 the expressions " in the taste de" , " style" , " manner de" , " de" kind; , " according to " , " way de" , do not confer any particular guarantee of identity of artist, date of work, or school.

Article 8 Very facsimiled, mould, copy or another reproduction of a work of art or an object of collection must be indicated like tel.

Article 9 Very facsimiled, mould, copy or another reproduction of an original work of art within the meaning of article 71 of appendix III of the General Tax Code, carried out subsequently to the date of coming into effect of this decree, must be marked in a visible and indelible way " Reproduction" .

Article 10 Whoever will have contravened the provisions of the articles 1st and 9 of this decree will be liable to the fines planned for the infringments of the fifth class.

Notes and references of the article

External Bonds and documents

don' T know auctions [http://www.youdontknowauctions.com]: didactic site carried out by Scholars off Chicago Kent College off Law [http://www.kentlaw.edu/honorsscholars] like off Chicago' S Department off To consume services] with the collaboration of [http://www.att.com]

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