We also realized that the incentives were never going to be perfect or even great, once we had a dynamic process with more than one buyer.
Surely having multiple buyers improves incentive compatibility? In the limit consider the stock market, with a arbitrarily large number of buyers and very well aligned incentives.
Competition amongst buyers improves incentives in general, but the added complexity quickly destroys the specific guarantee of incentive-compatibility enjoyed by a second price auction.
For example, when the sale price in one round is published, it means that making a cheap sale can easily be worse than making no sale at all, since it affects what you might be able to earn in future rounds.
That’s a particularly hard example to avoid. There are a bunch of other issues that seem easier to avoid, but only by placing increasingly strict constraints on the behavior of every buyer (e.g. once you make an offer on an item, you can never make any lower offer on the same item).
Surely having multiple buyers improves incentive compatibility? In the limit consider the stock market, with a arbitrarily large number of buyers and very well aligned incentives.
Competition amongst buyers improves incentives in general, but the added complexity quickly destroys the specific guarantee of incentive-compatibility enjoyed by a second price auction.
For example, when the sale price in one round is published, it means that making a cheap sale can easily be worse than making no sale at all, since it affects what you might be able to earn in future rounds.
That’s a particularly hard example to avoid. There are a bunch of other issues that seem easier to avoid, but only by placing increasingly strict constraints on the behavior of every buyer (e.g. once you make an offer on an item, you can never make any lower offer on the same item).