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Old 02-21-2019, 03:31 PM   #1
dmbolp
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Auction/Game Theory Strategies?

Any experts here? Live in a condo with 130 units, and 11 new storage rooms were added to a large unused space, HOA selling them thru an auction on www.32auctions.com. Units are similar size (4'x8'), all with starting bid of $5k (all-in cost of the units). 22 owners have expressed interest in an email questionnaire. The timing is suspect, and there are other, unrelated reasons to question the board...they've taken over a year to get this auction set up, kicking it down the road every month for a year. This past TUE was the monthly board meeting, the next day (yesterday) they finally sent out the auction format info, the auctions end on 3/18 which is the day before the next board meeting, so they can never be questioned about the auction format at a board meeting. Format is:

- You can bid on any/all auctions

- You don't have to pay at the end, the next high bidder gets a chance

- If you end up as the high bidder for multiple listings then you only get to buy the highest priced listing

- Proxy bidding allowed (so fake bidders can put in $1,000,000???)

- No popcorn bidding, all auctions end at the same time

Without any knowledge of Auction/Game Theory I think this format might possibly be the worst format for keeping prices low:

- Bidders aren't held to pay, so any idiot (re: HOA Board members, any owner who wants to beef up the HOA coffers) can bid up the prices on any/all auctions and not have to pay if they end up the high bidder, just forcing anyone actually interested and willing to pay to bid higher and higher

- Being able to bid on as many auctions as you want will result in a ridiculous number of bids, driving up the prices

- Even a legit buyer who ends up as high bidder for multiple auctions can only buy one, so I'm thinking there's no reason NOT to bid on all 11 auctions?

Hopefully we will be able to tell how many bidders get ahead of us, and then we can decide if we want to go higher. Other strategy is to wait, like eBay, and bid last minute, but then we may be paying too much over bad bidders.

What's the strategy to end up paying the least amount for a unit? I'm thinking bid on all initially, and hope there's one at the end where all other bidders are either non-paying or winners of other units.
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