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Auctions for Auckland Apartments

https://www.interest.co.nz/property/96200/there-were-plenty-buyers-latest-apartment-auctions-they-were-being-cautious-price

In Auckland, auctions are often held for luxury apartment complexes. These apartment complexes are often not perfect in the sense that some tend to be bigger, others tend to be really small, and one even had many leaks in the building. However, the apartments are still in high demand regardless. For example, of the 12 units that were auctioned off, nine of them had multiple bids and the highest one was the winner. However, there were some leasehold complexes that auctioned off pairs of identical apartment units, and the auctioneer negotiated deals so that the highest bidder made a deal for the pair of apartments, rather than buying one of the apartments in the pair. In short, pairs of identical apartments were sold to the same bidder as a package. The article also states that the pairs of the apartments that were auctioned off together gained higher bids from bidders than if bidders were bidding on them one at a time. The apartments were able to be auctioned off together because the vendors were the same.

This article relates to our lecture material about auctions because it was a ascending auction. Also, the bidders knew their own values but they were independent of others’ values for the apartment. This means that the independent and private meaning of each person’s value of the apartment had nothing to do with other people’s values for the apartment. Auctioning the identical pairs of apartments for one price to one bidder is also considered following the first price auction format because the highest winner still won the auction, but a further deal was made between the auctioneer and the highest bidder. The dominant strategy in this kind of auction was for the bidder to stay in the auction until his or her value was reached.

 

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