đź“… Original date posted:2017-11-30
đź“ť Original message:On Wed, Nov 29, 2017 at 9:52 PM, Chenxi Cai <Chenxi_Cai at live.com> wrote:
> Hi All,
>
>
> Auction theory is a well-studied problem in the economics literature.
> Currently what bitcoin has is Generalized first-price auction, where
> winning bidders pay their full bids. Alternatively, two approaches are
> potentially viable, which are Generalized second-price auction and Vickrey–Clarke–Groves
> auction. Generalized second-price auction, where winning bidders pay their
> next highest bids, reduces (but not eliminate) the need for bidders to
> strategize by allowing them to bid closer to their reservation
> price. Vickrey–Clarke–Groves auction, a more sophisticated system that
> considers all bids in relation to one another, elicit truthful bids from
> bidders, but may not maximize miners' fees as the other two systems will.
>
>
> Due to one result called Revenue Equivalence, the choice of fee design
> will not impact miners' fees unless the outcomes of the auction changes
> (i.e, the highest bidders do not always win). In addition, the sole benefit
> of second-price auction over first-price auction is to spare people's
> mental troubles from strategizing, rather than actually saving mining fees,
> because in equilibrium the fees bidders pay remain the same. Therefore, in
> balance, I do not see substantial material benefits arising from switching
> to a different fee schedule.
>
>
> Best,
>
> Chenxi Cai
>
>
Changing the bidding system to the marginal price allows us to supersede
the block size limit, which changes the outcome of the auction, as
different transactions are included.
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William Morriss [ARCHIVE] /
npub120…s33ld
2023-06-07 18:07:59
in reply to nevent1q…fykl
Author Public Key
npub120shhjns7ykj5yadnj050t54ntfxxrkwqmq3pstp3kx6rz2t0qvq2s33ldSeen on
wss://relay.nostr.bandPublished at
2023-06-07 18:07:59Event JSON
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"content": "📅 Original date posted:2017-11-30\n📝 Original message:On Wed, Nov 29, 2017 at 9:52 PM, Chenxi Cai \u003cChenxi_Cai at live.com\u003e wrote:\n\n\u003e Hi All,\n\u003e\n\u003e\n\u003e Auction theory is a well-studied problem in the economics literature.\n\u003e Currently what bitcoin has is Generalized first-price auction, where\n\u003e winning bidders pay their full bids. Alternatively, two approaches are\n\u003e potentially viable, which are Generalized second-price auction and Vickrey–Clarke–Groves\n\u003e auction. Generalized second-price auction, where winning bidders pay their\n\u003e next highest bids, reduces (but not eliminate) the need for bidders to\n\u003e strategize by allowing them to bid closer to their reservation\n\u003e price. Vickrey–Clarke–Groves auction, a more sophisticated system that\n\u003e considers all bids in relation to one another, elicit truthful bids from\n\u003e bidders, but may not maximize miners' fees as the other two systems will.\n\u003e\n\u003e\n\u003e Due to one result called Revenue Equivalence, the choice of fee design\n\u003e will not impact miners' fees unless the outcomes of the auction changes\n\u003e (i.e, the highest bidders do not always win). In addition, the sole benefit\n\u003e of second-price auction over first-price auction is to spare people's\n\u003e mental troubles from strategizing, rather than actually saving mining fees,\n\u003e because in equilibrium the fees bidders pay remain the same. Therefore, in\n\u003e balance, I do not see substantial material benefits arising from switching\n\u003e to a different fee schedule.\n\u003e\n\u003e\n\u003e Best,\n\u003e\n\u003e Chenxi Cai\n\u003e\n\u003e\nChanging the bidding system to the marginal price allows us to supersede\nthe block size limit, which changes the outcome of the auction, as\ndifferent transactions are included.\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20171129/e5fd0f84/attachment.html\u003e",
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