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Vickrey Auctions in Practice: From Nineteenth-Century Philately to Twenty-First-Century E-Commerce

  • David Lucking-Reiley

William Vickrey (1961) proposed an auction mechanism in which bidders submit sealed bids, and the highest bidder wins the good in return for payment of the second-highest bid amount. For decades, economists have credited Vickrey with inventing this auction format, and have believed that the Vickrey auction is rarely used in practice. This paper presents evidence that Vickrey auctions have long been the predominant auction format for mail sales of collectible postage stamps. Stamp auctioneers developed this auction format on their own, as early as 1893, even before Vickrey was born.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.14.3.183
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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 14 (2000)
Issue (Month): 3 (Summer)
Pages: 183-192

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Handle: RePEc:aea:jecper:v:14:y:2000:i:3:p:183-192
Note: DOI: 10.1257/jep.14.3.183
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  1. Lucking-Reiley, David, 2000. "Auctions on the Internet: What's Being Auctioned, and How?," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 227-52, September.
  2. Richard Arnott, 1998. "William Vickrey: Contributions to Public Policy," International Tax and Public Finance, Springer, vol. 5(1), pages 93-113, February.
  3. Rothkopf, Michael H & Harstad, Ronald M, 1995. "Two Models of Bid-Taker Cheating in Vickrey Auctions," The Journal of Business, University of Chicago Press, vol. 68(2), pages 257-67, April.
  4. Benny Moldovanu & Manfred Tietzel, 1998. "Goethe's Second-Price Auction," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 854-859, August.
  5. David Lucking-Reiley, 1999. "Using field experiments to test equivalence between auction formats: Magic on the internet," Framed Field Experiments 00183, The Field Experiments Website.
  6. Rothkopf, Michael H & Teisberg, Thomas J & Kahn, Edward P, 1990. "Why Are Vickrey Auctions Rare?," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 94-109, February.
  7. Milgrom, Paul, 1989. "Auctions and Bidding: A Primer," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 3-22, Summer.
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