The article “RightoftheDot.com Resolves Contention on New gTLD .One In Single Sealed Bid Auction” explained how the company Right On Dot has used a single sealed bid second price auction to auction off their new registries. They are beginning to auction off domain names that end in .one. These are highly sought after domain names because companies can use websites like theright.one, the.one, only.one, etc.
Right of the Dot is an industry leader in selling domain names and they are the first one to ever use a single sealed bid second price auction. The most common auction is the ascending clock auction but this type of auction can lead to bid rigging and also gives people “auction fever” meaning the buyer gets emotional and over bids. This over bidding can result in companies using money that they need for their startup and can lead them to fail quickly. The company decided to go with the single sealed bid second price auction is because as we learned in class it causes people to bet their real true value for the item. This is due to the fact that if they underbid they could lose when it was really possible for them to win with there true value, and they can’t overbid to win because the second price is the price the winner pays and the only way for them to save money were to be if the price was under their true perceived value anyway so in that case they should just bid their true value. This leads a truthful bid to be a weakly dominate strategy.
After the auction both buyers and Right of the Dot said that they were very happy with the way the auction went. Buyers applauded the company for not sticking to the norm and trying to satisfy both parties better. I think this is really cool that we learned this in class and the next week a company used this to make a more fair and efficient auction.