by Maybe you guys know a better forum to ask about this, but I didn't know where to start. It's not quite an ethical issue, but maybe it is.
Anyway, what do you do when you have an item, you don't know what it's worth, but you have a pool of (expert) buyers?
I call it the "Cross Auction".
To get information out of the pool, you auction off a commission for information. The pool bids the percent downwards until someone accepts the lowest rate.
When the auction completes, the accepter reveals an insurance price. This price has two values:
a) It gives the item holder insight as to how to offer the item to the rest of the crowd.
b) If the item doesn't sell, the accepter is committed to pay insurance.
If the item is sold, the accepter receives commission and walks away. If the item doesn't sell, the accepter pays what's revealed. Obviously, the accepter wants as much commission as possible, so he'll offer a high price, but not too high because he doesn't want to get stuck with the bill. On the other hand, everyone in the pool wants commission and first dibs at the item, so they're willing to bid down the rate...
...so for example, say you have an item and a pool of two. Bob thinks it's worth $100, Jim thinks it's worth $150.
Jim offers 10% and Bob offers 15% to get the same amount of cash out of the deal (let's keep it simple).
Jim then tells you it's worth $150. You go to Bob and negotiate, on average, to $125.
Bob gets the item, Jim gets ~$12.50, and you get ~$112.50 despite not knowing what the item was worth.
Seem fair?
Anyway, what do you do when you have an item, you don't know what it's worth, but you have a pool of (expert) buyers?
I call it the "Cross Auction".
To get information out of the pool, you auction off a commission for information. The pool bids the percent downwards until someone accepts the lowest rate.
When the auction completes, the accepter reveals an insurance price. This price has two values:
a) It gives the item holder insight as to how to offer the item to the rest of the crowd.
b) If the item doesn't sell, the accepter is committed to pay insurance.
If the item is sold, the accepter receives commission and walks away. If the item doesn't sell, the accepter pays what's revealed. Obviously, the accepter wants as much commission as possible, so he'll offer a high price, but not too high because he doesn't want to get stuck with the bill. On the other hand, everyone in the pool wants commission and first dibs at the item, so they're willing to bid down the rate...
...so for example, say you have an item and a pool of two. Bob thinks it's worth $100, Jim thinks it's worth $150.
Jim offers 10% and Bob offers 15% to get the same amount of cash out of the deal (let's keep it simple).
Jim then tells you it's worth $150. You go to Bob and negotiate, on average, to $125.
Bob gets the item, Jim gets ~$12.50, and you get ~$112.50 despite not knowing what the item was worth.
Seem fair?