Auctions for College Housing: how bad could it be?
As strange as it sounds, more and more people are turning to online real estate auctions each year. While that may be an intriguing idea for the average homeowner, it might be disastrous for the desperate college student. Every year, finding housing here in Ithaca is always a struggle. We are paying prices that have already been marked up two or three times the normal price of an apartment. But in this overly competitive market, imagine having to bid for your dorm or apartment next year. With the sheer amount of competition there really is no ceiling in a competitive market, so who knows how much rent could go up.
If we assume that, ideally, such auctions are second-price sealed bid, then the dominant strategy is to bid your true value. However, with additional factors like high demand and time constraints added to the hypothetical auction, you would be forced to raise your true value just to have a place to live. Auctions are ideal for selling luxury goods (things that people do not need to survive). But if people started to auction basic necessities like housing in an area that may not guarantee housing to everyone, then the consequences are dire.
http://www.forbes.com/sites/trulia/2016/10/11/4-reasons-to-sell-your-home-at-auction/#77c822617bcb