| Bookshelf Home | Contents | Index | Search | PDF | |
Siebel eAuction Guide > Vickrey and Reverse Vickrey Auctions > Bidding Rules Used with a Vickrey Auction >
Bidding Example — Vickrey Auction
Denver Reserve, a financial company, is auctioning off credit for refinancing through their Web site. Denver notified other banks with which they have done business about this auction. The auction will last for one hour.
When the auction opens, there are three banks participating in the refinancing auction. This auction is sealed and the bidders can only bid once.
- NCBS Bank bids for a 0.85% rate reduction.
- BankAmerica bids for a 0.9% rate reduction.
- Safeway Bank bids for a 1.0% rate reduction.
One hour later the auction has closed. Safeway Bank, with the highest bid, wins the auction. They pay the highest losing bid, which is a 0.9% rate reduction.
The lead contact for Safeway receives an email stating that the bank has won the auction.
| Bookshelf Home | Contents | Index | Search | PDF | |
Siebel eAuction Guide Published: 18 April 2003 |