First Price Auctions: Lollipops and Jewelry
My dad used to travel to the countryside for work when I was a child. The lollipops he brought back were amazing and nowhere to be found in the cities. I began selling these lollipops to my classmates for nearly five times the original price. The lollipops were so scarce and competitive as they gained popularity at my school. My customers’ interest grew significantly. As a result, when I just had a few pieces of lollipops left, customers began bidding for them. As I struggled to decide to whom to sell my candy, potential purchasers began to vie for my candy by offering higher prices. I eventually sell it for the highest price I was offered, as such one buyer says she will purchase it for 10, another offers 15, and another offers 20 and so on.
As such, I had unknowingly established a first price auction model for lollipops, where the highest bidder received the product sold. When this was discussed multiple times throughout our Networks course, my experiences throughout my childhood years coupled with in class lectures reinforced my understanding of first priced auctions. Within a larger context, first price auctions could be applied to other valued items such as jewelry. Specifically, the Serpenti watch in Italy was recently sold for millions of dollars. Similar to my lollipops auction in middle school, the Serpenti watch was a sought after piece of jewelry that held its value in its historical and artistic significance, attracting many interested buyers. Thus bidders submitted their bid until their value was reached, allowing the product to be sold at its highest value and the seller to maximize profit. This was a similar strategy I used as a seller in middle school, unaware of its prominent existence within the global context of auctions.
Source: https://www.nytimes.com/2022/12/05/fashion/bulgari-serpenti-75th-anniversary-rome.html