Briefly describe the difference between the mechanism of an oral or English auction and a Vickrey or second price auction. Is there any difference between the winning bidders in the two auctions, and the winning payments made in the two auctions? Briefly explain.
The mechanism of an oral or English auction is an open outcry auction. It is a progressive auction in which, the auctioneer releases relevant auctions with the help of announcing a suggested opening bid. In this suggested opening bid, there is a provision of the starting price, and then acceptance of higher bids occur with the probable interest in them. As the name suggests, this is an open outcry auction; therefore, it is entirely transparent. All the bidders know each other at the time of auction (Harstad & Rothkopf, 2000).
On the other hand, a Vickrey or second price auction is a sealed bid auction, which has some dissimilarity than English auction. It is not an open auction, because bidders propose written bids without recognizing the pertinent bid of the other ...
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