Dutch auction

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The Armchair Economist: Economics and Everyday Life by Steven E. Landsburg

Albert Einstein, Arthur Eddington, business cycle, diversified portfolio, Dutch auction, first-price auction, German hyperinflation, Golden Gate Park, information asymmetry, invisible hand, junk bonds, Kenneth Arrow, low interest rates, means of production, price discrimination, profit maximization, Ralph Nader, random walk, Ronald Coase, Sam Peltzman, Savings and loan crisis, sealed-bid auction, second-price auction, second-price sealed-bid, statistical model, the scientific method, Unsafe at Any Speed

The seller is also a strategic player in the auction game. He gets only one move, but it is the most important: He sets the rules. There are many types of auction. The most familiar is the common English auction, where bidders offer successively higher prices and drop out until only one remains. There is the Dutch auction, where an auctioneer calls out a very high price and successively lowers it until he receives an offer to buy. There is the first-price sealed bid auction, where each buyer submits a bid in an envelope, all are opened simultaneously, and the high bidder gets the item for the amount of his bid.

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The answer is yes if there happen to be two high bidders in the audience and no if Cursed Winners and Glum Losers 177 there happens to be just one. Because bidders are unlikely to reveal their bidding strategies in advance of the auction, the seller can never know for certain on any given night whether an English auction is preferable to, say, a Dutch auction. Even to decide between a first-price and a second-price sealed bid auction can be difficult for the seller. On the one hand, in a first-price auction he collects the high bid, while in a second-price auction he collects only the amount of the second-highest bid. On the other hand, bidders generally submit higher bids in a second-price auction.

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At this point, economic theory makes its entrance, to announce an astonishing truth. Under certain reasonable assumptions (about which I will soon say more), and as a matter of mathematical fact, all of the auction rules I've mentioned yield the same revenue to the seller on average over many auctions. If I regularly sell merchandise at English auctions, while you sell at Dutch auctions, your brother sells at first-price sealed bid auctions, your sister sells at second-price sealed bid auctions, and your crazy Uncle Fester sells at Glum Losers auctions, and if we all sell merchandise of comparable quality, then in the long run we must all do equally well. This result applies as well to a vast number of other auction rules—in fact, to any rule you can imagine that does not involve some entrance fee to the auction hall or its equivalent.

Concentrated Investing by Allen C. Benello

activist fund / activist shareholder / activist investor, asset allocation, barriers to entry, beat the dealer, Benoit Mandelbrot, Bob Noyce, Boeing 747, book value, business cycle, buy and hold, carried interest, Claude Shannon: information theory, corporate governance, corporate raider, delta neutral, discounted cash flows, diversification, diversified portfolio, Dutch auction, Edward Thorp, family office, fixed income, Henry Singleton, high net worth, index fund, John Bogle, John von Neumann, junk bonds, Louis Bachelier, margin call, merger arbitrage, Paul Samuelson, performance metric, prudent man rule, random walk, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, shareholder value, Sharpe ratio, short selling, survivorship bias, technology bubble, Teledyne, transaction costs, zero-sum game

It annoys Simpson to see companies announce a share buyback hoping to increase the stock price, and then not follow through and actually buy in stock.124 While he was at GEICO, the company bought more than 50 percent of its outstanding stock. The buybacks were so extensive that they moved Berkshire’s shareholding to the point that, before Buffett made the offer to buy the portion of GEICO it didn’t own, Berkshire owned slightly more than 50 percent, up from a third at inception. Simpson asked Buffett to sell into one of GEICO’s Dutch auction tenders.* GEICO asked Buffett to sell Berkshire’s interest proportionately. Buffett was reluctant to do so, but liked the idea of the buyback, and so agreed to tender on a pro rata basis. In all the companies where Simpson was an outside director, and while he was at GEICO, he argued for a standing authorization to buy in 10 percent of the company’s outstanding common stock.

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Additionally, the political risk exists that the government may interfere, which “they’ve already tried to a certain extent.”130 While the government hasn’t yet succeeded, they may try again, and the outcome of that intervention is unpredictable. “The economics appear attractive, but they are ultimately unknowable because of the political risk.”131 * In a Dutch auction, bidders submit bids detailing the number of shares, and the price at which they will sell. The final price is set at the lowest price at which the entire buyback will be complete, and all bidders at or below that price receive that price. Lou Simpson: The Disciplined Investor 23 He contrasts American Express with Nike, the sports footwear, apparel, and equipment manufacturer headquartered near Beaverton, Oregon.132 Simpson says he has a long history with Nike and made “a lot of money for GEICO over a period of time” on it.133 For GEICO, he bought it, sold it back, bought some more, sold it back, and then bought more than ever.

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Dragon (drill ship), 138–142, 143 Dimson, Elroy, 45 diversification Buffett on diversification versus concentration, 94–96, 95, 207–209 “closet indexers,” 27, 94–104, 95, 99, 100, 102, 103, 104, 123–124 diversification versus concentration, overview, 1–2 Graham on, 106 Keynes on, 62 Munger on diversification versus concentration, 96–97 Simpson on, 19, 27–28 Diversified Retailing, 110, 112 Dodd, David, 45 dollar cost averaging Keynes on, 51 Shannon’s Demon and, 80 Dolphin, 137 Drake, George, 159 Drexel Burnham Lambert, 144 DSND Subsea, 151–153 Durbin Amendment (Dodd-Frank), 192 Dutch auction, 22 Dutton, Gardiner, 160 E earnings yield, 19, 49 EBIDTA (earnings before interest, taxes, amortization, and depreciation), 154 Economic Consequences of Peace, The (Keynes), 40, 41 edge/odds, 76, 209–210 Edgewater Funds, 163 efficient market theory Munger on, 121, 207 overview, 3 Effjohn, 142 Elton, E.

Reinventing the Bazaar: A Natural History of Markets by John McMillan

accounting loophole / creative accounting, Albert Einstein, Alvin Roth, Andrei Shleifer, Anton Chekhov, Asian financial crisis, classic study, congestion charging, corporate governance, corporate raider, crony capitalism, Dava Sobel, decentralized internet, Deng Xiaoping, Dutch auction, electricity market, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Great Leap Forward, Hacker News, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, independent contractor, informal economy, information asymmetry, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John Perry Barlow, John von Neumann, Kenneth Arrow, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, ought to be enough for anybody, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Robert Solow, Ronald Coase, Ronald Reagan, sealed-bid auction, search costs, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, world market for maybe five computers, Xiaogang Anhui farmers, yield management

This way of running IPOs, in Hambrecht’s view, is unfair to the firm’s original owners and to small investors, who are excluded. He says, “There’s a real scam going on.” In place of the fixed share price, Hambrecht’s firm designed what it calls an open IPO, with an online auction of shares. The auction is a modified form of the Dutch auction, as used in the Aalsmeer flower market. Investors place bids for the number of shares they want to own and the price they want to pay. The price that emerges from this competitive market process aggregates the information and beliefs about the firm’s value held by all investors interested enough to submit bids.

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“It was all more ‘wing and a prayer’ really.”2 Let us imagine being charged with setting up eBay from scratch, and think about how we would go about systematically designing the auction mechanism. In what form should the bids be accepted? Most auctions use an open auction, as is traditionally used to sell art and antiques, in which the bidders go on topping each others’ bids until only one wants to continue. An alternative way of running the bidding is the Dutch auction, used to sell flowers at Aalsmeer, in which the price starts high and falls until a bidder claims the item. Another is the sealed-bid auction, in which there is a single round of sealed bids; the high bidder wins and pays his or her bid. Commercial real estate is sometimes sold this way. A variant is the second-price auction, in which there is a single round of bidding and the high bidder wins, but unlike first-price auctions, the price paid is the second-highest bid.

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An auction site is more valuable to a seller if it already attracts more buyers. In turn, buyers go where the sellers already are, which makes the site still more attractive to sellers. Since eBay was there first, the network externality helps make its success self-perpetuating. Myriad auction mechanisms can be found on the various online auction sites. Dutch auctions are used to sell containers on oceangoing cargo vessels. Sealed-bid auctions are used for selling vacation time-shares. A few sites allow package bidding. One wine auction site, for example, packages bottles into sets (usually different vintages from a particular vineyard). It then accepts not only bids on the individual bottles but also all-or-nothing bids on the package.

Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian, Tom Griffiths

4chan, Ada Lovelace, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, algorithmic bias, algorithmic trading, anthropic principle, asset allocation, autonomous vehicles, Bayesian statistics, behavioural economics, Berlin Wall, Big Tech, Bill Duvall, bitcoin, Boeing 747, Charles Babbage, cognitive load, Community Supported Agriculture, complexity theory, constrained optimization, cosmological principle, cryptocurrency, Danny Hillis, data science, David Heinemeier Hansson, David Sedaris, delayed gratification, dematerialisation, diversification, Donald Knuth, Donald Shoup, double helix, Dutch auction, Elon Musk, exponential backoff, fault tolerance, Fellow of the Royal Society, Firefox, first-price auction, Flash crash, Frederick Winslow Taylor, fulfillment center, Garrett Hardin, Geoffrey Hinton, George Akerlof, global supply chain, Google Chrome, heat death of the universe, Henri Poincaré, information retrieval, Internet Archive, Jeff Bezos, Johannes Kepler, John Nash: game theory, John von Neumann, Kickstarter, knapsack problem, Lao Tzu, Leonard Kleinrock, level 1 cache, linear programming, martingale, multi-armed bandit, Nash equilibrium, natural language processing, NP-complete, P = NP, packet switching, Pierre-Simon Laplace, power law, prediction markets, race to the bottom, RAND corporation, RFC: Request For Comment, Robert X Cringely, Sam Altman, scientific management, sealed-bid auction, second-price auction, self-driving car, Silicon Valley, Skype, sorting algorithm, spectrum auction, Stanford marshmallow experiment, Steve Jobs, stochastic process, Thomas Bayes, Thomas Malthus, Tragedy of the Commons, traveling salesman, Turing machine, urban planning, Vickrey auction, Vilfredo Pareto, Walter Mischel, Y Combinator, zero-sum game

That’s bad enough—but the other players aren’t going to bid their true valuations either, because they’re shading their bids based on their prediction of yours! We are back in the land of recursion. Another classic auction format, the “Dutch auction” or “descending auction,” gradually lowers an item’s price until someone is willing to buy it. The name references the Aalsmeer Flower Auction, the largest flower auction in the world, which takes place daily in the Netherlands—but Dutch auctions are more prevalent than they might initially seem. A store marking down its unsold items, and landlords listing apartments at the highest price they think the market will bear, both share its basic quality: the seller is likely to begin optimistically and nudge the price down until a buyer is found.

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This seems to offer something closer to what we want: here, if you value an item at $25 and I value it at $10, you’ll win it for just over $10 without either having to go all the way to $25 or disappearing down the strategic rabbit hole. Both the Dutch auction and English auction introduce an extra level of complexity when compared to a sealed-bid auction, however. They involve not only the private information that each bidder has but also the public flow of bidding behavior. (In a Dutch auction, it is the absence of a bid that reveals information, by making it clear that none of the other bidders value the item at the current price level.) And under the right circumstances, this mixing of private and public data can prove toxic.

The Inner Lives of Markets: How People Shape Them—And They Shape Us by Tim Sullivan

Abraham Wald, Airbnb, airport security, Al Roth, Alvin Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, behavioural economics, Brownian motion, business cycle, buy and hold, centralized clearinghouse, Chuck Templeton: OpenTable:, classic study, clean water, conceptual framework, congestion pricing, constrained optimization, continuous double auction, creative destruction, data science, deferred acceptance, Donald Trump, Dutch auction, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, Gunnar Myrdal, helicopter parent, information asymmetry, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, opioid epidemic / opioid crisis, Pareto efficiency, Paul Samuelson, Peter Thiel, pets.com, pez dispenser, power law, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Solow, Ronald Coase, school choice, school vouchers, scientific management, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, techno-determinism, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uber lyft, uranium enrichment, Vickrey auction, Vilfredo Pareto, WarGames: Global Thermonuclear War, winner-take-all economy

They existed back in the fifth century BC, when Roman historian Herodotus describes descending price auctions (where the price starts high and is gradually lowered until a bidder jumps in to purchase the item) as the mechanism of choice for marrying off young well-to-do Babylonian women. (Descending price auctions are still in use today to sell flowers in Holland; as a result, they’re called Dutch auctions.) Auctioneers have experimented with all sorts of different rules and protocols over the centuries. There are Japanese auctions, reverse auctions, double auctions, continuous double auctions, Yankee auctions. In a Scottish (or time-interval) auction, all bidding must close within a prespecified time period.

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., 169–170, 172 Camp, Garrett, 170 candle auctions, 82 capitalism, free-market, 172–173 car service platform, 169–171 cash-back bonus, 116 cash-for-sludge transactions, 167–169 See also Summers, Larry centralized clearinghouses, 140–141 Champagne fairs, 105–106, 126–128 Changi POW camp, 175–177 Le Chatelier, Henry Louis, 29 Le Chatelier’s principle, 29 cheap talk, 62–66, 69 chess, difference between Cold War and, 26 See also poker, bluffing in child labor, 180 cigarettes, as currency in German POW camp, 8–9 Clarke, Edward, 93 Clavell, James, 175 clerkship offers, with federal judges, 140 coat hook, 151–152, 174 Codes of the Underworld (Gambetta), 68 Cold War, difference between chess and, 26 See also poker, bluffing in Collectible Supplies, 128–129 “College Admissions and the Stability of Marriage” (Gale and Shapley), 137 commitment, signs of, 62–63, 69–71, 72–75 community game, 178–179 competition models of, 35, 166, 172–173 platform, 124–126 unethical conduct with, 180–181 “Competition is for Losers” (Thiel), 173 competitive equilibrium, existence of, 29, 31–34, 36–37, 40, 45, 76 competitive markets, 35, 124–126, 172–174, 180–181 See also platforms competitive signaling, 70–71 congestion pricing model, 86, 94 constrained optimization, 85–86, 133 contractorsfromhell.com, 120 copycat competitors, 172–173 corporate philanthropy, 72–75 Cowles, Alfred, 25, 27 Cowles Commission for Research in Economics, 25, 27, 31, 134 “creative destruction,” 50 credit card platforms, 113–116, 123–124 criminal organizations, informational challenges of, 68 currency, at Stalag VII-A POW camp, 8–9 customer feedback, 52, 74–75 Davis, Harry, 154, 157 Debreu, Gérard, 20, 24, 25, 32–33, 36–37 decentralized match, 139–140 deferred acceptance algorithm, 137–141, 145–149 Delmonico, Frank, 164 descending price auctions, 81–82 design, auction, 14, 101–102 Digital Dealing (Hall), 94 Discover card, 115–116 distribution of income, 22 Domar, Evsey, 36–37 Dorosin, Neil, 142–144 Douglas Aircraft Company, 25 Dow, Bob, 1–2 Dow, Edna, 1–2 Drèze, Jacques, 85–86 dumping toxic waste, transactions for, 167–169 Dutch auctions, 81–82 dysfunction, market, 36, 75–77, 143 eBay adverse selection on, 51–55, 57 auction listings, 94–97 concerns on model for, 43, 46, 48 on seller motivation for giving to charities, 73–75 start of, 39–41 as two-sided market, 109, 119 e-commerce, 41–43, 52–55 “The Economic Organization of a P.O.W.

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, An Inconvenient Truth, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, classic study, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Dutch auction, Ford Model T, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, Great Leap Forward, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Jon Ronson, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, meritocracy, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, tacit knowledge, tech worker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, vertical integration, winner-take-all economy, working poor, zero-sum game

It was also taken for granted that when it comes to high-end activities, America and other affluent nations will always have the edge, given they possess more advanced technologies. Hence, the competition was not seen as a matter of cost but as the application of smart knowledge for which companies were willing to pay a premium. But the global auction for jobs increasingly works in reverse to an auction where the highest bidder wins. In a reverse or Dutch auction, bids decline in value as the goal is to drive down prices. These auctions are becoming more popular on the Internet involving bidding competitions for business-to-business services. The German Web site jobdumping.de offered a stark example of a reverse auction. Cleaning, clerical, and catering jobs were offered by employers with a maximum price for the job; those looking for employment then underbid each other, and the winner was the person willing to work for the lowest wages.

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See also colleges and universities acquisitive learning, 145 and the American Dream, 13–14 core competencies, 103 Corporate Executive Board (CEB), 85 corporate executives, 26, 131, 159–60, 162, 187n31 corporate profits, 98, 104–5, 110, 124, 127, backlash, 149 blue-collar worker, 84 China, 7–8, 29–30, 32–35 cost of, 183n18 and creativity, 155–56 159, 160, 186n21 cost centers, 105 craft workers, 70, 127 creativity, 8, 18–21, 66–67, 75, 90, 104, 155–56 credentials, 7, 139, 184–85n2, 186n16 digital Taylorism, 67, 82, 155, 186n16 economic returns from, 116–17 emerging economies, 7, 30, 35, 39, 99 credentials, 7, 84–85, 97, 136, 138–41, 161, 163, 183n19, 184–85n2, 186n16 flexicurity, 156–57 and gender, 138 cultural capital, 140 culture, 187n30 Customatix, 102 and government, 16 growing up absurd, 144–45 higher education expansion, 35, 161 customer contact centers, 73–74 customization, 101 high-skill, low-wage workforce, 9, 91 human capital, 17, 116–17, 155–56, 185n3 Czech Republic, 35 Dahrendorf, Ralph, 146 income inequalities and, 12, 133–34, 156 inquisitive learning, 145 knowledge economy, 2, 25 Daniels, Mike, 77 data entry, 81 knowledge wars, 28, 168n3 learning is earning mantra, 185n3 de Chabrol, Ernest, 1 de Tocqueville, Alexis, 1–3, 164 Democrats, 31–32 meritocracy, 182n3 minorities, 138 A Nation at Risk, 27–28 demonstrators, 81, 155 Denzel, Nora, 77 neoliberalism, 12, 35 opportunity bargain, 4–6, 27–28 developed economies, 61, 154, 161–62 developers, 81 Dewey, John, 154–56 opportunity trap, 131, 138 paper chase, 139, 162 as personal choice, 25 diagnosis shopping, 144 digital Taylorism, 8–9, 65–67, 72–82, 84, 97, players’ tactics, 143 positional goods, 136 111, 127, 147–48, 155, 160, 174n27, 174n33, 174–75n34, 176n9, 186n16 diversity, 96, 177n26 preferences of privilege, 135 productivity, 40 and prosperity, 154–57 division of labor, 67, 104 Donofrio, Nicholas, 100–101 Dragons at Your Door, 57 drones, 81, 155 drop-out rates, 27, 35 Drucker, Peter F., 18, 65–66, 81 recessions, 38, 169n24 reverse auction, 114 ROI (return on investment), 149 as “secular religion,” 15 and self-interest, 156 social inequalities of, 162 Dutch auction, 7 and social mobility, 34 STEM subjects studies, 155 war for talent, 84, 90 white-collar workers, 84–85 within-group inequality of salaries, 179n13 Eberstadt, Mary, 146 economies of scale, 58, 174–75n34 economy of hope, 148–49, 164 Index 191 192 efficiency, 16 efficiency engineers, 69 efficiency experts, 77, 80 Freeman, Richard, 7–8, 35 Friedman, Milton, 24 Friedman, Thomas, 22–23, 66, 111, 114, 123 Eisenbrey, Ross, 121 elites, 25–26, 81, 115–16, 125, 134, 148, 150, 153–54, 161–62, 184n27, 187n31 emerging economies, 30, 57, 59, 61–64, 81, 92, 99, 108, 111, 130–31, 147–48, 151, Galbraith, James K., 71, 186n21 Gates, Bill, 163 gender, 117, 118, 133, 138 The General Theory of Employment, Interest and 153–54, 161–62 empathy, 79 empty suits, 103–6, 160 Engels, Friedrich, 113 Money, 4 Generation X, 19 Generation Y, 19 George, Roy, 10 entitlement generation, 9, 114–15, 183n19 environmental consequences, 186n16 Germany, 38, 43, 49–50, 63, 102, 107, 124 Gerschenkron, Alexander, 61 ethnic hierarchies, 89–90 European Union, 39, 44, 45, 59, 156–57 exception principle, 73 global auction, 2, 5–7, 13, 21, 48, 58, 98–99, 103–7, 109, 113, 119, 121, 124–25, 127–28, 132, 137–38, 148–49, 159 factor price equalization, 59 global economy, 3, 9 global labor pool, 35 Fallows, James, 151 Farrell, Diana, 35, 46 FastTech, 83–87 globalization benefits of, 148 economic performance, 63 FDI (foreign direct investment), 53–54 financial crash of 2008, 2, 6, 13, 26, 43, 60, emerging economies, 111 free trade, 178n21 91, 108, 112, 114, 158, 187n31 financial services industry, 8, 37, 51, 60, 73, 77–78, 86–88, 95, 109–10, 111–12, 125, government as economic partner, 158–59 human capital, 27 impact world-wide, 10 148, 151 Fitzgerald, Scott T., 182n48 knowledge wars, 30–35 knowledge workers, 110–12 flattening, 111, 148.

Stigum's Money Market, 4E by Marcia Stigum, Anthony Crescenzi

accounting loophole / creative accounting, Alan Greenspan, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Black-Scholes formula, book value, Brownian motion, business climate, buy and hold, capital controls, central bank independence, centralized clearinghouse, corporate governance, credit crunch, Credit Default Swap, cross-border payments, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, disintermediation, distributed generation, diversification, diversified portfolio, Dutch auction, financial innovation, financial intermediation, fixed income, flag carrier, foreign exchange controls, full employment, Glass-Steagall Act, Goodhart's law, Greenspan put, guns versus butter model, high net worth, implied volatility, income per capita, intangible asset, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, land bank, large denomination, locking in a profit, London Interbank Offered Rate, low interest rates, margin call, market bubble, market clearing, market fundamentalism, Money creation, money market fund, mortgage debt, Myron Scholes, offshore financial centre, paper trading, pension reform, Phillips curve, Ponzi scheme, price mechanism, price stability, profit motive, proprietary trading, prudent man rule, Real Time Gross Settlement, reserve currency, risk free rate, risk tolerance, risk/return, Savings and loan crisis, seigniorage, shareholder value, short selling, short squeeze, tail risk, technology bubble, the payments system, too big to fail, transaction costs, two-sided market, value at risk, volatility smile, yield curve, zero-coupon bond, zero-sum game

Notes, like bills, are sold through auctions held by the Federal Reserve. In these auctions, participants bid yields, and the securities offered are sold to those dealers and investors who bid the lowest yields, that is, the lowest interest cost to the Treasury. These days, the Treasury conducts “Dutch” auctions, which are also known as “single-price” auctions, wherein all bidders are awarded the same price—the highest yield required to sell the entire amount offered. Thus, the coupon rate on new Treasury notes, like the yield on bills, is determined by the market. Until August 2001, the Treasury also issued interest-bearing negotiable bonds, with a maturity at issue of 30 years.

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Noncompetitive bids are limited to $5 million and are usually due before noon (ET) on auction day; competitive bidding usually closes at 1 p.m. Treasury auctions are conducted in a single-price format, which was first introduced in 1992 following several violations of auction rules in 1991. Single-price auctions are sometimes known as Dutch auctions. Empirical analysis of the auction format was compelling enough for the Treasury in 1998 to switch all its auctions to the single-price format. The multiple-price format had been in place since 1929, and it stayed in place until the 1970s when the Treasury introduced auctions of coupon-bearing securities.

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The securities are available in minimum increments of $2,000 and in subsequent increments of $1,000. Fannie’s benchmark bills program consists of sales of 3- and 6-month maturities on a set weekly auction schedule, and monthly sales of 1-year securities. While benchmark bills are a component of the regular discount notes program, they are unlike discount notes in that they are issued via a Dutch-auction process using Web-based technology. As with discount notes, the benchmark bills program is conducted via securities dealers, and auction bids are obtained via the Internet. Bids may be competitive or noncompetitive, with noncompetitive bids allowed up to a maximum of 20 percent of a transaction.

The Sushi Economy: Globalization and the Making of a Modern Delicacy by Sasha Issenberg

air freight, Akira Okazaki, anti-communist, barriers to entry, Boeing 747, Bretton Woods, call centre, company town, creative destruction, Deng Xiaoping, Dutch auction, flag carrier, global supply chain, Golden arches theory, haute cuisine, means of production, Nixon shock, Nixon triggered the end of the Bretton Woods system, Saturday Night Live, Silicon Valley, special economic zone, standardized shipping container, telemarketer, trade route, urban renewal

At the Sydney Fish Market in Australia, administrators in 1989 implemented a digital auction system. There, approximately two hundred buyers sit daily in auditorium-style rows with desks featuring built-in computer keypads—the room is an odiferous facsimile of a land-grant lecture hall—and look up at three large overhead screens. One item is up for bid on each by Dutch auction: Starting bids are set at approximately two dollars more than the anticipated sale price, and a red dot moves counterclockwise around a circle. Inside the circle is information on the type of product, the size of the lot, its weight, and the seller, which is often augmented by further information by an announcer over a PA system.

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See quotas (catch) Caucasian sushi chefs Chan, Jackie Chase, Brad Che Guevara Reader, The (Guevara) Chennault, Claire Child, Julia China Chinese factories for laundering tuna chinganas chu-toro cut of tuna Clinton, Bill clothes, Tsukiji Market “coastal open cities,” cold-storage chains Cole, Tyson commodity to good, fish compressor conservationist regulations consignments consumption, changing landscape of conveyor belt sushi bars cookbooks (Japanese) “cool tastings,” Costello, Michael Cowgill, Mic creative chefs Croatia customers fast food, sushi as orders from reaction to sushi regular cuts of tuna cutting boards cutting tuna cycle of fishery cyclone massacre Daikichiro, Kodaka daimyo Dalian damp towels (oshibori) Davis, Peter “day of the flying fish, the,” death chamber DeChellis, Josh “Dellionaires,” De Niro, Robert Dennis, Peter department stores as market for ranched tuna devaluing of U.S. dollar “diamond of the ocean,” See also tuna diet craze and sushi Dingell, John diversification “Divine Principle,” Ducasse, Alain Dutch auctions “ecogastronomy,” economic indicator, sushi Edo-mae nigiri sushi eel Egypt fishing Empires of the Sky (Sampson) ethnic foods, California ethnic symmetry, image “exclusive economic zone,” exporters, preferring China family-owned firms Fannin, Casey farming tuna. See ranching tuna fast food, sushi as fattening tuna fatty (abu) food and Japan feeding tuna female sushi chefs Ferlinghetti, Lawrence fermenting fish first-wave sushi restaurants fish economy.

Corporate Finance: Theory and Practice by Pierre Vernimmen, Pascal Quiry, Maurizio Dallocchio, Yann le Fur, Antonio Salvi

"Friedman doctrine" OR "shareholder theory", accelerated depreciation, accounting loophole / creative accounting, active measures, activist fund / activist shareholder / activist investor, AOL-Time Warner, ASML, asset light, bank run, barriers to entry, Basel III, Bear Stearns, Benoit Mandelbrot, bitcoin, Black Swan, Black-Scholes formula, blockchain, book value, business climate, business cycle, buy and hold, buy low sell high, capital asset pricing model, carried interest, collective bargaining, conceptual framework, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, currency risk, delta neutral, dematerialisation, discounted cash flows, discrete time, disintermediation, diversification, diversified portfolio, Dutch auction, electricity market, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, fixed income, Flash crash, foreign exchange controls, German hyperinflation, Glass-Steagall Act, high net worth, impact investing, implied volatility, information asymmetry, intangible asset, interest rate swap, Internet of things, inventory management, invisible hand, joint-stock company, joint-stock limited liability company, junk bonds, Kickstarter, lateral thinking, London Interbank Offered Rate, low interest rates, mandelbrot fractal, margin call, means of production, money market fund, moral hazard, Myron Scholes, new economy, New Journalism, Northern Rock, performance metric, Potemkin village, quantitative trading / quantitative finance, random walk, Right to Buy, risk free rate, risk/return, shareholder value, short selling, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stocks for the long run, supply-chain management, survivorship bias, The Myth of the Rational Market, time value of money, too big to fail, transaction costs, value at risk, vertical integration, volatility arbitrage, volatility smile, yield curve, zero-coupon bond, zero-sum game

If too many shares are tendered under the offer, the company scales back all the surrender requests in proportion. If too few are tendered, it cancels the shares that are tendered. If management decides on a tender offer, it has the option of considering the traditional fixed-price offering or the Dutch auction method. In Dutch auctions, the firm no longer offers to repurchase shares at a single price, but rather announces a range of prices. Each shareholder thus must specify an acceptable selling price within the prescribed range set by the company. If he chooses a high selling price, he will increase his proceeds provided that the shares are accepted by the company, but he reduces the probability that shares will be accepted for repurchase.

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Buyers will not like this and will demand a higher interest rate the next time the issuer comes to the primary market. Competitive bidding is similar to a bought deal and is often used by state-owned companies, as well as companies that have already tapped the bond markets. Other placement techniques exist (but they are usually used by sovereign issuers): Dutch Auctions (“reverse auctions”) are one example. Book-building helps avoid price weakness after launch, as the issue price (or spread) is not pre-set. The lead bank suggests a price range and sounds out investors to see what price they are willing to pay. Presentations to investors, one-on-one meetings and electronic roadshows over the Internet or Bloomberg allow management to present its strategy.

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G. Grullon, R. Michaely, Dividends, share repurchases and the substitution hypothesis, Journal of Finance, 57, 1649–1684, August 2002. G. Grullon, R. Michaely, The information content of share repurchase programs, Journal of Finance, 59(2), 651–680, April 2004. B. Hausch, D. Logue, J. Seward, Dutch auction share repurchases: Theory and evidence, in D. Chew (ed.), The New Corporate Finance: Where Theory Meets Practice, 2nd edn, McGraw-Hill, 1999. M. Jagannathan, C. Stephens, M. Weisbach, Financial flexibility and the choice between dividends and stock repurchases, Journal of Financial Economics, 57, 355–384, September 2000.

Money Free and Unfree by George A. Selgin

Alan Greenspan, asset-backed security, bank run, banking crisis, barriers to entry, Bear Stearns, break the buck, Bretton Woods, business cycle, capital controls, central bank independence, centralized clearinghouse, Charles Lindbergh, credit crunch, Credit Default Swap, crony capitalism, disintermediation, Dutch auction, fear of failure, fiat currency, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, foreign exchange controls, Fractional reserve banking, German hyperinflation, Glass-Steagall Act, Hyman Minsky, incomplete markets, inflation targeting, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, large denomination, liquidity trap, Long Term Capital Management, low interest rates, market microstructure, Money creation, money market fund, moral hazard, Network effects, Northern Rock, oil shock, Paul Samuelson, Phillips curve, plutocrats, price stability, profit maximization, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, Robert Gordon, Robert Solow, Savings and loan crisis, savings glut, seigniorage, special drawing rights, The Great Moderation, the payments system, too big to fail, transaction costs, Tyler Cowen, unorthodox policies, vertical integration, Y2K

In particular, Buiter (2008b) proposes that, during financial market disruptions, the Bank of England (and other central banks, presumably) should offer to purchase or accept as repo collateral “a slightly extended version of what the ECB currently accepts,” to wit, any security “rated at least in the single A category.” To discover the value of illiquid instruments, and avoid subsidizing their sellers, the Bank can purchase them by means of a “reverse Dutch auction,” in which an initial, minimum purchase price is raised progressively until either no buyers are left or the predetermined purchase amount is met (see also Buiter 2007, 2008a). Buiter and Sibert’s proposal has come under criticism for assuming that central banks can, by means of appropriately designed auctions, determine efficient prices even for heterogeneous financial instruments, such as mortgage-backed securities, that lack deep markets and so may not assure multiple auction offers (Smith 2007).

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In fact, the Fed first began purchasing substantial quantities of Treasury securities on the open market in response to pressure from the Treasury following U.S. entry into World War I. The Treasuries-only policy dates from the 1930s. For further details, see Marshall (2002) as well as David Small and James Clouse (2005). 36. According to Buiter (2008a), private security purchases conducted by means of reverse Dutch auctions would guarantee purchase prices reflecting illiquid securities’ fundamental values but sufficiently “punitive” to guard against both moral hazard and excessive Fed exposure to credit risk. Cecchetti and Disyatat (2010), in contrast, claim that “liquidity support will often be, and probably should be, provided at a subsidized rate when it involves a liquid asset where a market price cannot be found.” 37.

This Could Be Our Future: A Manifesto for a More Generous World by Yancey Strickler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Abraham Maslow, accelerated depreciation, Adam Curtis, basic income, benefit corporation, Big Tech, big-box store, business logic, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, corporate governance, Daniel Kahneman / Amos Tversky, data science, David Graeber, Donald Trump, Doomsday Clock, Dutch auction, effective altruism, Elon Musk, financial independence, gender pay gap, gentrification, global supply chain, Hacker News, housing crisis, Ignaz Semmelweis: hand washing, invention of the printing press, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Nash: game theory, Joi Ito, Joseph Schumpeter, Kickstarter, Kōnosuke Matsushita, Larry Ellison, Louis Pasteur, Mark Zuckerberg, medical bankruptcy, Mr. Money Mustache, new economy, Oculus Rift, off grid, offshore financial centre, Parker Conrad, Ralph Nader, RAND corporation, Richard Thaler, Ronald Reagan, Rutger Bregman, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Solyndra, stem cell, Steve Jobs, stock buybacks, TechCrunch disrupt, TED Talk, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Travis Kalanick, Tyler Cowen, universal basic income, white flight, Zenefits

For example: Adele’s experiment led to others reprogramming financially maximizing algorithms to maximize for fairness. This extended the value life of the original algorithms and allowed for fairness-maximizing strategies to be applied to housing, medical care, travel, and even traffic. These affirmative algorithms, as they were called, used the logic of reverse Dutch auctions to match price and competency minimums with need maximums in real estate, school access, and other uses of shared public resources. Companies reverse engineered the algorithms that cluster and rank their users for marketing purposes, and reused them to create mentorship and peer circles among community members.

The End of Traffic and the Future of Transport: Second Edition by David Levinson, Kevin Krizek

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, American Society of Civil Engineers: Report Card, autonomous vehicles, barriers to entry, Bay Area Rapid Transit, big-box store, bike sharing, carbon tax, Chris Urmson, collaborative consumption, commoditize, congestion pricing, crowdsourcing, DARPA: Urban Challenge, dematerialisation, driverless car, Dutch auction, Elon Musk, en.wikipedia.org, Ford Model T, Google Hangouts, high-speed rail, Induced demand, intermodal, invention of the printing press, jitney, John Markoff, labor-force participation, Lewis Mumford, lifelogging, Lyft, means of production, megacity, Menlo Park, Network effects, Occam's razor, oil shock, place-making, pneumatic tube, post-work, printed gun, Ray Kurzweil, rent-seeking, ride hailing / ride sharing, Robert Gordon, self-driving car, sharing economy, Silicon Valley, Skype, smart cities, tacit knowledge, techno-determinism, technological singularity, Tesla Model S, the built environment, The future is already here, Thomas Kuhn: the structure of scientific revolutions, transaction costs, transportation-network company, Uber and Lyft, Uber for X, uber lyft, urban renewal, women in the workforce, working-age population, Yom Kippur War, zero-sum game, Zipcar

For instance, the passes would be available at a posted price ('buy-it-now'), but the agency would also accept lower bids. Suppose there were 100 passes, there would be a bidding period, and at the end of the period, the top 100 bids would win and the price would be set at the willingness to pay of the 100th bidder. There are many variations on auctions (what we described is referred to as a Dutch Auction). Each have different advantages for buyers or sellers in terms of maximizing revenue or price discovery or fairness. Certainly there are trade-offs between efficiency and equity, and some users will be priced off the roads — if they weren't, what would be the point? There will also be some uncertainty if passes are auctioned, especially as price discovery takes place.

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

23andMe, Abraham Maslow, Alan Greenspan, Andy Kessler, bank run, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bob Noyce, bread and circuses, British Empire, business cycle, business process, California gold rush, carbon credits, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, Cornelius Vanderbilt, creative destruction, disintermediation, Douglas Engelbart, Dutch auction, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kickstarter, knowledge economy, knowledge worker, Larry Ellison, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Michael Milken, Money creation, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, vertical integration, wealth creators, Yogi Berra

Markets are about trading stuff; it doesn’t have to be just stocks (which is just trading in the profits of companies). Free Radicals can trade goods, services, and especially information—anything of value—and let the market set the value. It could be open outcry markets, electronic trading, auctions, reverse auctions, modified Dutch auctions, who cares. Just make sure there are participants. The stock market is the largest in size and volume, but it’s all relative. Stock markets are more efficient than the market for, I don’t know, automobiles or wine or cherry Slurpees. What I’m suggesting is to create a market price for everything you do—for your products and services, for your employee ratings and raises, for customer service, everything.

Principles of Corporate Finance by Richard A. Brealey, Stewart C. Myers, Franklin Allen

3Com Palm IPO, accelerated depreciation, accounting loophole / creative accounting, Airbus A320, Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, banking crisis, Bear Stearns, Bernie Madoff, big-box store, Black Monday: stock market crash in 1987, Black-Scholes formula, Boeing 747, book value, break the buck, Brownian motion, business cycle, buy and hold, buy low sell high, California energy crisis, capital asset pricing model, capital controls, Carl Icahn, Carmen Reinhart, carried interest, collateralized debt obligation, compound rate of return, computerized trading, conceptual framework, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, cross-subsidies, currency risk, discounted cash flows, disintermediation, diversified portfolio, Dutch auction, equity premium, equity risk premium, eurozone crisis, fear index, financial engineering, financial innovation, financial intermediation, fixed income, frictionless, fudge factor, German hyperinflation, implied volatility, index fund, information asymmetry, intangible asset, interest rate swap, inventory management, Iridium satellite, James Webb Space Telescope, junk bonds, Kenneth Rogoff, Larry Ellison, law of one price, linear programming, Livingstone, I presume, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, low interest rates, market bubble, market friction, money market fund, moral hazard, Myron Scholes, new economy, Nick Leeson, Northern Rock, offshore financial centre, PalmPilot, Ponzi scheme, prediction markets, price discrimination, principal–agent problem, profit maximization, purchasing power parity, QR code, quantitative trading / quantitative finance, random walk, Real Time Gross Settlement, risk free rate, risk tolerance, risk/return, Robert Shiller, Scaled Composites, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, Skype, SpaceShipOne, Steve Jobs, subprime mortgage crisis, sunk-cost fallacy, systematic bias, Tax Reform Act of 1986, The Nature of the Firm, the payments system, the rule of 72, time value of money, too big to fail, transaction costs, University of East Anglia, urban renewal, VA Linux, value at risk, Vanguard fund, vertical integration, yield curve, zero-coupon bond, zero-sum game, Zipcar

Dual-currency bond Bond with interest paid in one currency and principal paid in another. Du Pont formula Formula expressing relationship between return on assets, sales-to-assets, profit margin, and measures of leverage. Duration The average number of years to an asset’s discounted cash flows. Dutch auction In a Dutch auction investors submit the prices at which they are prepared to buy (or sell) the security. The purchase price is the lowest price that allows the firm to sell (or buy) the specified amount of the security. E EBIT Earnings before interest and taxes. EBITDA Earnings before interest, taxes, depreciation, and amortization.

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By far the most common method is for the firm to announce that it plans to buy its stock in the open market, just like any other investor.5 However, companies sometimes use a tender offer where they offer to buy back a stated number of shares at a fixed price, which is typically set at about 20% above the current market level. Shareholders can then choose whether to accept this offer. A third procedure is to employ a Dutch auction. In this case the firm states a series of prices at which it is prepared to repurchase stock. Shareholders submit offers declaring how many shares they wish to sell at each price and the company calculates the lowest price at which it can buy the desired number of shares. Finally, repurchase sometimes takes place by direct negotiation with a major shareholder.

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In this case the stock price on average declined by 9.5% on the announcement and earnings fell over the next four quarters. 9The dividend policies of Japanese keiretsus are analyzed in K. L. Dewenter and V. A. Warther, “Dividends, Asymmetric Information, and Agency Conflicts: Evidence from a Comparison of the Dividend Policies of Japanese and U.S. Firms,” Journal of Finance 53 (June 1998), pp. 879–904. 10R. Comment and G. Jarrell, “The Relative Signalling Power of Dutch-Auction and Fixed Price Self-Tender Offers and Open-Market Share Repurchases,” Journal of Finance 46 (September 1991), pp. 1243–1271. There is also evidence of continuing superior performance during the years following a repurchase announcement. See D. Ikenberry, J. Lakonishok, and T. Vermaelen, “Market Underreaction to Open Market Share Repurchases,” Journal of Financial Economics 39 (October 1995), pp. 181–208. 11Not only do managers hold on to their stock; on average they also add to their holdings before the announcement of a repurchase.

In the Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy

"World Economic Forum" Davos, 23andMe, AltaVista, Andy Rubin, Anne Wojcicki, Apple's 1984 Super Bowl advert, autonomous vehicles, Bill Atkinson, book scanning, Brewster Kahle, Burning Man, business process, clean water, cloud computing, crowdsourcing, Dean Kamen, discounted cash flows, don't be evil, Donald Knuth, Douglas Engelbart, Douglas Engelbart, Dutch auction, El Camino Real, Evgeny Morozov, fault tolerance, Firefox, General Magic , Gerard Salton, Gerard Salton, Google bus, Google Chrome, Google Earth, Googley, high-speed rail, HyperCard, hypertext link, IBM and the Holocaust, informal economy, information retrieval, Internet Archive, Jeff Bezos, John Markoff, Ken Thompson, Kevin Kelly, Kickstarter, large language model, machine translation, Mark Zuckerberg, Menlo Park, one-China policy, optical character recognition, PageRank, PalmPilot, Paul Buchheit, Potemkin village, prediction markets, Project Xanadu, recommendation engine, risk tolerance, Rubik’s Cube, Sand Hill Road, Saturday Night Live, search inside the book, second-price auction, selection bias, Sheryl Sandberg, Silicon Valley, SimCity, skunkworks, Skype, slashdot, social graph, social software, social web, spectrum auction, speech recognition, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, subscription business, Susan Wojcicki, Ted Nelson, telemarketer, The future is already here, the long tail, trade route, traveling salesman, turn-by-turn navigation, undersea cable, Vannevar Bush, web application, WikiLeaks, Y Combinator

Credit Suisse, which had done a great job on the questionnaire, was a dark horse that became the co–lead bank, along with Morgan Stanley, which, as Google’s team had expected, diligently answered the questions. Even though Hambrecht was known as the pioneer of the auction-based IPO, it was Morgan Stanley that developed the technology to run the Dutch auction that would determine opening prices. Google wasn’t the easiest client. For one thing, it specified that the fees it would pay would be 2.8 percent of the sale, about half the accustomed rate. (That sent Merrill Lynch running—no way it would allow Google to set that precedent.) There were also the complications of the auction, which would take much more time and attention than the normal IPO.

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As the auction date approached, an accumulation of further missteps hounded Google. Some of them involved the auction process. Google had spent a lot of time working out the details, using a team that included its chief economist, Hal Varian, and experts from academia. The company had come up with a way to implement a Dutch auction, in which the final bid—the amount paid by all winners—would be the lowest bid that would raise the required amount of money to buy the offered shares. Meanwhile, Page pushed for a test that prospective investors would be required to pass: answer three questions about Google, just to make sure that you understand the company and aren’t just making a trendy bid.

China's Superbank by Henry Sanderson, Michael Forsythe

"World Economic Forum" Davos, addicted to oil, Asian financial crisis, Bretton Woods, BRICs, Carmen Reinhart, Credit Default Swap, deindustrialization, Deng Xiaoping, Dutch auction, failed state, financial innovation, financial repression, fixed income, Great Leap Forward, high-speed rail, if you build it, they will come, income inequality, invisible hand, joint-stock company, junk bonds, Kenneth Rogoff, land bank, London Interbank Offered Rate, low interest rates, megacity, new economy, New Urbanism, price mechanism, race to the bottom, reserve currency, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Solyndra, South Sea Bubble, sovereign wealth fund, special drawing rights, special economic zone, too big to fail, urban renewal, urban sprawl, work culture

Gao Jian: Creating a Market for “Risk-Free” Bonds Gao Jian, a soft-spoken man whom we met in Chapter 1, began his love affair with the bond market while at the sleepy Ministry of Finance in the early 1990s. He used a tender method for the first time to sell 1 billion yuan of bonds for the ministry in a Dutch auction, using a Hongtashan cigarette box to hold the handwritten bids. China basically had no bond market then, with the central bank using its reloan facility to control the money supply. The nation’s stock exchanges had only just been founded, and there were few corporate bonds. Until early 1999, CDB bonds had been administratively distributed to state-owned commercial banks, and CDB borrowed directly from the central bank.

The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby

"Susan Fowler" uber, 23andMe, 90 percent rule, Adam Neumann (WeWork), adjacent possible, Airbnb, Apple II, barriers to entry, Ben Horowitz, Benchmark Capital, Big Tech, bike sharing, Black Lives Matter, Blitzscaling, Bob Noyce, book value, business process, charter city, Chuck Templeton: OpenTable:, Clayton Christensen, clean tech, cloud computing, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer vision, coronavirus, corporate governance, COVID-19, cryptocurrency, deal flow, Didi Chuxing, digital map, discounted cash flows, disruptive innovation, Donald Trump, Douglas Engelbart, driverless car, Dutch auction, Dynabook, Elon Musk, Fairchild Semiconductor, fake news, family office, financial engineering, future of work, game design, George Gilder, Greyball, guns versus butter model, Hacker Ethic, Henry Singleton, hiring and firing, Hyperloop, income inequality, industrial cluster, intangible asset, iterative process, Jeff Bezos, John Markoff, junk bonds, Kickstarter, knowledge economy, lateral thinking, liberal capitalism, Louis Pasteur, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, Marshall McLuhan, Mary Meeker, Masayoshi Son, Max Levchin, Metcalfe’s law, Michael Milken, microdosing, military-industrial complex, Mitch Kapor, mortgage debt, move fast and break things, Network effects, oil shock, PalmPilot, pattern recognition, Paul Graham, paypal mafia, Peter Thiel, plant based meat, plutocrats, power law, pre–internet, price mechanism, price stability, proprietary trading, prudent man rule, quantitative easing, radical decentralization, Recombinant DNA, remote working, ride hailing / ride sharing, risk tolerance, risk/return, Robert Metcalfe, ROLM, rolodex, Ronald Coase, Salesforce, Sam Altman, Sand Hill Road, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, smart grid, SoftBank, software is eating the world, sovereign wealth fund, Startup school, Steve Jobs, Steve Wozniak, Steven Levy, super pumped, superconnector, survivorship bias, tech worker, Teledyne, the long tail, the new new thing, the strength of weak ties, TikTok, Travis Kalanick, two and twenty, Uber and Lyft, Uber for X, uber lyft, urban decay, UUNET, vertical integration, Vilfredo Pareto, Vision Fund, wealth creators, WeWork, William Shockley: the traitorous eight, Y Combinator, Zenefits

The advantages of being unlisted lie elsewhere: lower regulatory costs, clearer oversight of managers (provided that boards are vigilant), and a greater ability to surprise competitors with innovations that are developed under the radar. BACK TO NOTE REFERENCE 62 Between 1999 and 2019, an average of only two IPOs per year were conducted as auctions. See data from Jay Ritter of the University of Florida, table 13, site.warrington.ufl.edu/ritter/files/IPO-Statistics.pdf. Following Google’s Dutch auction, tech startups tended to opt for traditional IPOs: examples include Facebook, LinkedIn, and Twitter. Later, other sorts of IPOs were tried. Spotify and Slack chose direct listings, not auctions. The Benchmark partner Bill Gurley emerged as a champion of IPO reform, sponsoring a conference on the subject in October 2019.

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See Digital Sky Technologies due diligence, 97–98, 104, 114, 214, 240, 323 Dunlevie, Bruce eBay investment, 165–66, 167, 169, 171–72 founding of Benchmark, 161–62 offering advice, 162–63, 165–66, 440n WeWork investment, 342–43, 344, 360, 371–72 du Pont, Lammot, 418n Duquesne University, 256 Durant, Kevin, 302 Dutch auctions, 442n Dylan, Bob, 375 Dynabook Technologies, 128, 146 E EachNet, 233 “early bird,” 314 Eastwood, Clint, 66, 426n eBay, 164–70, 287, 292 Benchmark investment, 164–70, 350, 439n, 440n founding of, 164–65 PayPal acquisition, 206–8, 248 Skype acquisition, 191, 297, 448n Whitman as CEO, 167–69, 184 economic geography, 95–96 Efrusy, Kevin, 249–57, 305 Facebook investment, 253–61, 449n Myspace investment, 252–53 Skype investment, 251–52 egalitarianism, 19, 52–53, 56, 57 Egypt Pyramid Technology Park, 223 8VC, 391 80/20 rule, 7, 131, 209–10 Electroglas, 42–43, 421n Electronic Frontier Foundation, 436n Elfers, Bill, 51–52, 432n employee stock ownership, 45–46, 92, 398 Alibaba, 231, 233 Apple and Markkula, 85 Chinese law and, 231, 232, 233, 240 eBay, 170 Facebook and Milner, 275–77 Fairchild Semiconductor, 36–37, 45, 46, 54 Genentech, 77 Intel and Rock, 56–57, 84, 424n JD.com, 237 tax policy and, 92, 398 Emtage, Alan, 20 endowments.

Who Gets What — and Why: The New Economics of Matchmaking and Market Design by Alvin E. Roth

Affordable Care Act / Obamacare, Airbnb, algorithmic trading, barriers to entry, behavioural economics, Berlin Wall, bitcoin, Build a better mousetrap, centralized clearinghouse, Chuck Templeton: OpenTable:, commoditize, computer age, computerized markets, crowdsourcing, deferred acceptance, desegregation, Dutch auction, experimental economics, first-price auction, Flash crash, High speed trading, income inequality, Internet of things, invention of agriculture, invisible hand, Jean Tirole, law of one price, Lyft, market clearing, market design, medical residency, obamacare, PalmPilot, proxy bid, road to serfdom, school choice, sealed-bid auction, second-price auction, second-price sealed-bid, Silicon Valley, spectrum auction, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, The Wealth of Nations by Adam Smith, two-sided market, uber lyft, undersea cable

Since the first bid stops the clock, these auctions can be very fast—a good thing, since time is of the essence when you’re buying cut flowers. A big international marketplace operates this way in the Netherlands, right near the Amsterdam airport, from which flowers can be shipped around the world. As a result, this kind of descending bid auction is often called a Dutch auction. Most of the signals we’ve talked about so far are signals that people send about themselves. College applicants, job candidates, and prospective mates signal their talents, skills, and interests. You could think about all those signals as being sent from the seller to the buyer. Signals about quality are like that: they’re of the form, I’m a good student, a desirable mate, a restaurant that people are willing to stand in line for.

Flash Boys: A Wall Street Revolt by Michael Lewis

automated trading system, bash_history, Berlin Wall, Bernie Madoff, collateralized debt obligation, computerized markets, drone strike, Dutch auction, Fall of the Berlin Wall, financial intermediation, Flash crash, High speed trading, information security, latency arbitrage, National best bid and offer, pattern recognition, payment for order flow, Pershing Square Capital Management, proprietary trading, risk tolerance, Rubik’s Cube, Sergey Aleynikov, Small Order Execution System, Spread Networks laid a new fibre optics cable between New York and Chicago, the new new thing, too big to fail, trade route, transaction costs, Vanguard fund

How much to twenty-five different players—to share the same advantage over the rest of the market? To answer these sorts of questions, it helps to know how much money traders can make purely from speed in the U.S. stock market, and how, exactly, they make it. “No one knew this market,” says Spivey. “It was opaque.” They considered holding a Dutch auction—that is, start at some high reserve price and lower it until the line was bought by a single Wall Street firm, which would then enjoy a monopoly. They weren’t confident that any one bank or hedge fund would fork over the many billions of dollars they assumed the monopoly was worth, and they didn’t like the sound of the inevitable headlines in the newspapers: Barksdale Makes Billions Selling Out Ordinary American Investor.

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity by Douglas Rushkoff

activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, bank run, banking crisis, barriers to entry, benefit corporation, bitcoin, blockchain, Burning Man, business process, buy and hold, buy low sell high, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, centralized clearinghouse, citizen journalism, clean water, cloud computing, collaborative economy, collective bargaining, colonial exploitation, Community Supported Agriculture, corporate personhood, corporate raider, creative destruction, crowdsourcing, cryptocurrency, data science, deep learning, disintermediation, diversified portfolio, Dutch auction, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, fiat currency, Firefox, Flash crash, full employment, future of work, gamification, Garrett Hardin, gentrification, gig economy, Gini coefficient, global supply chain, global village, Google bus, Howard Rheingold, IBM and the Holocaust, impulse control, income inequality, independent contractor, index fund, iterative process, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joseph Schumpeter, Kickstarter, Large Hadron Collider, loss aversion, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, Marshall McLuhan, means of production, medical bankruptcy, minimum viable product, Mitch Kapor, Naomi Klein, Network effects, new economy, Norbert Wiener, Oculus Rift, passive investing, payday loans, peer-to-peer lending, Peter Thiel, post-industrial society, power law, profit motive, quantitative easing, race to the bottom, recommendation engine, reserve currency, RFID, Richard Stallman, ride hailing / ride sharing, Ronald Reagan, Russell Brand, Satoshi Nakamoto, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, social graph, software patent, Steve Jobs, stock buybacks, TaskRabbit, the Cathedral and the Bazaar, The Future of Employment, the long tail, trade route, Tragedy of the Commons, transportation-network company, Turing test, Uber and Lyft, Uber for X, uber lyft, unpaid internship, Vitalik Buterin, warehouse robotics, Wayback Machine, Y Combinator, young professional, zero-sum game, Zipcar

Google figured it had enough name recognition and a clear enough value proposition for its potential investors. Plus, it wanted to demonstrate a more democratic style by offering the very first shares to the general public instead of just to the insiders at Goldman Sachs and Morgan Stanley. They did a Dutch auction, through which anyone with a brokerage account could bid on any amount of shares, at any price. After the bidding, the highest price at which every available share could be sold became the price for all the shares—in this case, $85 per share, or a total of $23 billion. 49, 50 Investment bankers called the auction a “disaster” and claimed they could have gotten Google a much higher price had they been allowed to offer the shares to their usual clients in the traditional, closed fashion.51 Then those clients could have sold shares to the hungry public on the open exchange and reaped even more.

The Global Money Markets by Frank J. Fabozzi, Steven V. Mann, Moorad Choudhry

asset allocation, asset-backed security, bank run, Bear Stearns, Bretton Woods, buy and hold, collateralized debt obligation, credit crunch, currency risk, discounted cash flows, discrete time, disintermediation, Dutch auction, financial engineering, fixed income, Glass-Steagall Act, high net worth, intangible asset, interest rate derivative, interest rate swap, land bank, large denomination, locking in a profit, London Interbank Offered Rate, Long Term Capital Management, margin call, market fundamentalism, money market fund, moral hazard, mortgage debt, paper trading, Right to Buy, short selling, stocks for the long run, time value of money, value at risk, Y2K, yield curve, zero-coupon bond, zero-sum game

One important difference between the two is that Reference Bills® are offered in more maturities namely, one month (28 days), two months (56 days), three months (91 days), six months (182 days), and one year (364 days). Like U.S. Treasury bills and Benchmark Bills, Reference Bills are sold weekly using a Dutch auction. 1-month and 2-month Reference Bills are auctioned each week on Monday, while 3-month maturities are auctioned weekly on Tuesday. The 6-month and 1-year Reference Bills are auctioned every four weeks on Tuesday on an alternating schedule such that every two weeks either a 6-month or a 1-year maturity will be auctioned.

The Lords of Easy Money: How the Federal Reserve Broke the American Economy by Christopher Leonard

2021 United States Capitol attack, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, collateralized debt obligation, coronavirus, corporate governance, COVID-19, Donald Trump, Dutch auction, financial engineering, financial innovation, fixed income, Ford Model T, forensic accounting, forward guidance, full employment, glass ceiling, Glass-Steagall Act, global reserve currency, Greenspan put, hydraulic fracturing, income inequality, inflation targeting, Internet Archive, inverted yield curve, junk bonds, lockdown, long and variable lags, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, Money creation, mortgage debt, new economy, obamacare, pets.com, power law, proprietary trading, quantitative easing, reserve currency, risk tolerance, Robinhood: mobile stock trading app, Ronald Reagan, Silicon Valley, stock buybacks, too big to fail, yield curve

But Powell managed to explain everything in such a bloodless way that it seemed to drain the passion of his inquisitors. After the hearings, Powell oversaw the writing of a lengthy report on the scandal, and the role of regulators who enabled it. Ultimately, very little was changed. The Treasury Department amended the way Treasury auctions were conducted, moving to the “Dutch auction” style, which was seen as harder to game. Mozer was convicted and sent to prison. Salomon’s CEO, John Gutfreund, was fined $100,000. Powell was promoted. He became undersecretary of the Treasury at the age of thirty-nine. His tenure in that role was cut short, however, when George H. W. Bush lost his reelection bid.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

Alan Greenspan, Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, Bletchley Park, business cycle, California gold rush, Charles Babbage, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Dr. Strangelove, Dutch auction, Edward Lloyd's coffeehouse, electricity market, equity premium, equity risk premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, Fairchild Semiconductor, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, George Akerlof, George Gilder, Goodhart's law, Great Leap Forward, greed is good, Gunnar Myrdal, haute couture, Helicobacter pylori, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, junk bonds, Kenneth Arrow, Kevin Kelly, knowledge economy, Larry Ellison, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Michael Milken, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, Phillips curve, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, proprietary trading, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, Stuart Kauffman, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, work culture , yield curve, yield management

The National Grid continues to operate a central control room, which assures continuity of supply while bids and offers determine the associated financial settlements. Analogous arrangements are found in all other electricity markets. 11. Prices were raised in 1974 to levels that equate to $20 per barrel (in 2002 dollars). 12. The most famous Dutch flower market, at Aalsmeer, operates quite differently, with a clock and an auction mechanism. The "Dutch auction" is different from the "English auction," used for Dr. Gachet. 13. The New York Stock Exchange is an auction market, in which specialists facilitate trade but do not take positions on their own account. On NASDAQ, buyers and sellers are matched electronically. The American Stock Exchange is also an auction market, but some specialists act as dealers. 14.

Jennifer Morgue by Stross, Charles

Boeing 747, call centre, Carl Icahn, correlation does not imply causation, disinformation, disintermediation, dumpster diving, Dutch auction, Etonian, haute couture, interchangeable parts, Maui Hawaii, messenger bag, MITM: man-in-the-middle, mutually assured destruction, operational security, PalmPilot, planetary scale, RFID, Seymour Hersh, Silicon Valley, Skype, slashdot, stem cell, telepresence, traveling salesman, Turing machine

No she bloody isn't! I try to yell at him, but he's playing the usual tricks with my vocal chords and I'm not allowed to say anything that isn't on the menu. Propelled by the usual inexorable dream logic the briefing continues. "Billington has let it be known that he will be conducting an advance Dutch auction for the specimens he expects to raise from JENNIFER MORGUE Site Two. These are described in vague but exciting terms, as chthonic artifacts and applications. There is of course no mention of his expertise in operating Gravedust-type oneiromantic convolution engines, or of the presence of a deceased DEEP SEVEN in the vicinity.

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance by Ron Chernow

Alan Greenspan, always be closing, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Bolshevik threat, book value, Boycotts of Israel, Bretton Woods, British Empire, buy and hold, California gold rush, capital controls, Carl Icahn, Charles Lindbergh, collective bargaining, Cornelius Vanderbilt, corporate raider, death from overwork, Dutch auction, Etonian, financial deregulation, financial engineering, fixed income, German hyperinflation, Glass-Steagall Act, index arbitrage, interest rate swap, junk bonds, low interest rates, margin call, Michael Milken, military-industrial complex, money market fund, Monroe Doctrine, North Sea oil, oil shale / tar sands, old-boy network, paper trading, plutocrats, Robert Gordon, Ronald Reagan, short selling, stock buybacks, strikebreaker, Suez canal 1869, Suez crisis 1956, the market place, the payments system, too big to fail, transcontinental railway, undersea cable, Yom Kippur War, young professional

Having to cope with inflation and unstable exchange rates, corporate treasurers were receptive to bright ideas thought up by competing banks to deal with the new volatility. Jack Bennett of Exxon delighted in making Morgan Stanley spar with other firms. “We decided that any time a banker came up with a good idea, we’d talk to him,” said Bennett. When he set up “Dutch auctions” for issues, encouraging several competing syndicates, Morgan Stanley began to sense that its sole manager policy faced a mortal threat. For Morgan Stanley, the doomsday trumpet sounded in 1979. That year, IBM asked the firm to accept Salomon Brothers as co-manager on a $1-billion debt issue needed for a new generation of computers.

…

There was no outright illegality in the Bell’s takeover, but things were skirting the edge. Apparently a Guinness employee, pretending to be a Scottish reporter, questioned Raymond Miquel.9 Also, Saunders had assured Bell’s shareholders that he might sell the Piccadilly Hotel in London but keep the rest. Then through Morgan Grenfell’s property arm, he set up a Dutch auction for the Caledonian and North British hotels in Edinburgh. The winning bidder, Norfolk Capital, came as a shock, because its chairman was none other than Tony Richmond-Watson of Morgan Grenfell. There were, predictably, accusations of favoritism and double-dealing. By this point, both Guinness and Morgan Grenfell seemed ripe for trouble.

Networks, Crowds, and Markets: Reasoning About a Highly Connected World by David Easley, Jon Kleinberg

Albert Einstein, AltaVista, AOL-Time Warner, Apollo 13, classic study, clean water, conceptual framework, Daniel Kahneman / Amos Tversky, Douglas Hofstadter, Dutch auction, Erdős number, experimental subject, first-price auction, fudge factor, Garrett Hardin, George Akerlof, Gerard Salton, Gerard Salton, Gödel, Escher, Bach, incomplete markets, information asymmetry, information retrieval, John Nash: game theory, Kenneth Arrow, longitudinal study, market clearing, market microstructure, moral hazard, Nash equilibrium, Network effects, Pareto efficiency, Paul Erdős, planetary scale, power law, prediction markets, price anchoring, price mechanism, prisoner's dilemma, random walk, recommendation engine, Richard Thaler, Ronald Coase, sealed-bid auction, search engine result page, second-price auction, second-price sealed-bid, seminal paper, Simon Singh, slashdot, social contagion, social web, Steve Jobs, Steve Jurvetson, stochastic process, Ted Nelson, the long tail, The Market for Lemons, the strength of weak ties, The Wisdom of Crowds, trade route, Tragedy of the Commons, transaction costs, two and twenty, ultimatum game, Vannevar Bush, Vickrey auction, Vilfredo Pareto, Yogi Berra, zero-sum game

The seller gradually raises the price, bidders drop out until finally only one bidder remains, and that bidder wins the object at this final price. Oral auctions in which bidders shout out prices, or submit them electronically, are forms of ascending-bid auctions. 2. Descending-bid auctions, also called Dutch auctions. This is also an interactive auction format, in which the seller gradually lowers the price from some high initial value until the first moment when some bidder accepts and pays the current price. These auctions are called Dutch auctions because flowers have long been sold in the Netherlands using this procedure. 3. First-price sealed-bid auctions. In this kind of auction, bidders submit simultaneous “sealed bids” to the seller.

I'm Feeling Lucky: The Confessions of Google Employee Number 59 by Douglas Edwards

"World Economic Forum" Davos, Albert Einstein, AltaVista, Any sufficiently advanced technology is indistinguishable from magic, AOL-Time Warner, barriers to entry, book scanning, Build a better mousetrap, Burning Man, business intelligence, call centre, commoditize, crowdsourcing, don't be evil, Dutch auction, Elon Musk, fault tolerance, Googley, gravity well, invisible hand, Jeff Bezos, job-hopping, John Markoff, Kickstarter, machine translation, Marc Andreessen, Menlo Park, microcredit, music of the spheres, Network effects, PageRank, PalmPilot, performance metric, pets.com, Ralph Nader, risk tolerance, second-price auction, Sheryl Sandberg, side project, Silicon Valley, Silicon Valley startup, slashdot, stem cell, Superbowl ad, Susan Wojcicki, tech worker, The Turner Diaries, Y2K

Many of these advisors had been randomly dialing every phone extension at Google for months, trying to line up clients before the IPO. I had ignored the calls, but now I was curious about what the professionals had to say. The IPO was coming in August and I needed to think about what it might mean for me. The road to the IPO was rocky. Larry and Sergey wanted to sell stock directly to the public through a Dutch auction, in which the stock price would be gradually lowered until all shares were sold. They thought that would be democratic and allow broad participation. They saw the traditional way of going public as a broken system. Wall Street investment banks insisted on pricing shares artificially low so that they popped up on the first day of trading and the banks made a killing on the shares they owned.

Radical Uncertainty: Decision-Making for an Unknowable Future by Mervyn King, John Kay

Airbus A320, Alan Greenspan, Albert Einstein, Albert Michelson, algorithmic trading, anti-fragile, Antoine Gombaud: Chevalier de Méré, Arthur Eddington, autonomous vehicles, availability heuristic, banking crisis, Barry Marshall: ulcers, battle of ideas, Bear Stearns, behavioural economics, Benoit Mandelbrot, bitcoin, Black Swan, Boeing 737 MAX, Bonfire of the Vanities, Brexit referendum, Brownian motion, business cycle, business process, capital asset pricing model, central bank independence, collapse of Lehman Brothers, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, DeepMind, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, Donald Trump, Dutch auction, easy for humans, difficult for computers, eat what you kill, Eddington experiment, Edmond Halley, Edward Lloyd's coffeehouse, Edward Thorp, Elon Musk, Ethereum, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, fear of failure, feminist movement, financial deregulation, George Akerlof, germ theory of disease, Goodhart's law, Hans Rosling, Helicobacter pylori, high-speed rail, Ignaz Semmelweis: hand washing, income per capita, incomplete markets, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Jeff Bezos, Jim Simons, Johannes Kepler, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, John von Neumann, Kenneth Arrow, Kōnosuke Matsushita, Linda problem, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, market bubble, market fundamentalism, military-industrial complex, Money creation, Moneyball by Michael Lewis explains big data, Monty Hall problem, Nash equilibrium, Nate Silver, new economy, Nick Leeson, Northern Rock, nudge theory, oil shock, PalmPilot, Paul Samuelson, peak oil, Peter Thiel, Philip Mirowski, Phillips curve, Pierre-Simon Laplace, popular electronics, power law, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, railway mania, RAND corporation, reality distortion field, rent-seeking, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Coase, sealed-bid auction, shareholder value, Silicon Valley, Simon Kuznets, Socratic dialogue, South Sea Bubble, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Suez crisis 1956, Tacoma Narrows Bridge, Thales and the olive presses, Thales of Miletus, The Chicago School, the map is not the territory, The Market for Lemons, The Nature of the Firm, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Davenport, Thomas Malthus, Toyota Production System, transaction costs, ultimatum game, urban planning, value at risk, world market for maybe five computers, World Values Survey, Yom Kippur War, zero-sum game

A second is a sealed bid auction, often used in competitive tendering for public contracts, in which contenders submit their proposals and on a specified day the envelopes are opened and the lowest bidder is awarded the contract. An alternative sealed bid procedure gives the contract to the lowest bidder, but at the price offered by the runner-up. This means that bidders can reveal their true valuations without worrying that their bids might affect the price they will pay if successful. A fourth procedure, the ‘Dutch auction’, is so named because it is employed in the market at Aalsmeer near Amsterdam airport, one of the largest buildings in the world, where flowers from around the world are bought and sold. A large clock displays a gradually declining price until a bidder stops the clock by agreeing to buy (if in Amsterdam, get up early enough and you will be amazed by how quickly the clock disposes of an extremely large number of flowers).

The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze by Laura Shin

"World Economic Forum" Davos, 4chan, Airbnb, altcoin, bike sharing, bitcoin, blockchain, Burning Man, cloud computing, complexity theory, Credit Default Swap, cryptocurrency, DevOps, digital nomad, distributed ledger, Dogecoin, Donald Trump, Dutch auction, Edward Snowden, emotional labour, en.wikipedia.org, Ethereum, ethereum blockchain, fake news, family office, fiat currency, financial independence, Firefox, general-purpose programming language, gravity well, hacker house, Hacker News, holacracy, independent contractor, initial coin offering, Internet of things, invisible hand, Johann Wolfgang von Goethe, Julian Assange, Kickstarter, litecoin, low interest rates, Mark Zuckerberg, minimum viable product, off-the-grid, performance metric, Potemkin village, prediction markets, QR code, ride hailing / ride sharing, risk tolerance, risk/return, Satoshi Nakamoto, sharing economy, side project, Silicon Valley, Skype, smart contracts, social distancing, software as a service, Steve Jobs, Turing complete, Vitalik Buterin, Wayback Machine, WikiLeaks

One ICO that blew the lid off even Golem’s in November was Gnosis (GNO), which, like Augur, was a decentralized prediction market. The Berlin-based team held the sale out of Gibraltar, a jurisdiction that, like Switzerland and Singapore, had crypto-friendly regulations. Their goal was $12.5 million, and they tried a new mechanism. Instead of a first-come-first-served-style ICO, they held a Dutch auction, which meant the starting price, $30, would be the ceiling. The price would continuously lower so that after two weeks, it would be $5. Theoretically, people would bid at the price they felt was most reasonable instead of buying early and thus overpaying. They set aside ten million tokens for the sale.

The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations by Sebastian Mallaby

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, Bretton Woods, capital controls, clean water, Dr. Strangelove, Dutch auction, export processing zone, failed state, financial independence, Francis Fukuyama: the end of history, gentleman farmer, guns versus butter model, Hernando de Soto, Kenneth Rogoff, Kickstarter, land reform, land tenure, lateral thinking, low interest rates, market bubble, Martin Wolf, microcredit, oil shock, Oklahoma City bombing, old-boy network, Paul Samuelson, plutocrats, purchasing power parity, radical decentralization, rolodex, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the new new thing, trade liberalization, traveling salesman, War on Poverty, Westphalian system, Yom Kippur War

According to one assessment, “The outpouring of [World Bank] loans to Zambia from 1965 to 1976, when most of the disastrous policies were being generated, took place despite the fact that they were well understood by 1974, were at least partially understood by 1971 and should have been broadly understood even earlier.” “From Dutch Disease to Dutch Auction: A Retrospective Review of the Zambian Structural Adjustment Program,” by Benjamin King, 1988, paragraph 106. Quoted in Kapur et al., World Bank, p. 698. 15. The key expression of this orthodoxy was the so-called Berg Report, named after its main author, a University of Michigan economist called Elliot Berg.

Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Alvin Toffler, An Inconvenient Truth, Asian financial crisis, back-to-the-land, barriers to entry, Bear Stearns, Berlin Wall, big-box store, blood diamond, Boeing 747, book value, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, clean tech, cognitive dissonance, commoditize, company town, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, Dr. Strangelove, Dutch auction, Easter island, edge city, Edward Glaeser, Eyjafjallajökull, failed state, financial engineering, flag carrier, flying shuttle, food miles, Ford Model T, Ford paid five dollars a day, Frank Gehry, fudge factor, fulfillment center, full employment, future of work, Future Shock, General Motors Futurama, gentleman farmer, gentrification, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Great Leap Forward, Haber-Bosch Process, Hernando de Soto, high-speed rail, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Jevons paradox, Joan Didion, Kangaroo Route, Kickstarter, Kiva Systems, knowledge worker, kremlinology, land bank, Lewis Mumford, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, megaproject, Menlo Park, microcredit, military-industrial complex, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, planned obsolescence, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, SimCity, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, Suez canal 1869, sunk-cost fallacy, supply-chain management, sustainable-tourism, tech worker, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, the long tail, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, vertical integration, Virgin Galactic, walkable city, warehouse robotics, white flight, white picket fence, Yogi Berra, zero-sum game

The flowers are here too— slowly cycling through the hall on a track beneath the clocks, entering from stage left or right and leaving through a center set of doors. One of the auctioneers plucks a stem from each lot and holds it high for all to see, but the buyers barely have time to glance at it before returning to the task at hand. Just like that, the flowers are gone, sold before they’ve even left the room. The point of Dutch auctions is their speed. The Aalsmeer averages more than a thousand transactions per clock per hour—one every three seconds or so. There are five of these rooms, including one just for potted plants, another for garden varieties, and the Rose Room, which is the largest auction of all. Two billion rosebuds a year are funneled through it, and depending on the prices commanded for each stem, they could end up in an oligarch’s manse in Moscow or in the produce aisle of an Essex Tesco.

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Alan Greenspan, Albert Einstein, algorithmic trading, Andy Kessler, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, BRICs, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, carbon credits, Carl Icahn, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, Daniel Kahneman / Amos Tversky, deal flow, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Dr. Strangelove, Dutch auction, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial engineering, financial independence, financial innovation, financial thriller, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, global reserve currency, Goldman Sachs: Vampire Squid, Goodhart's law, Gordon Gekko, greed is good, Greenspan put, happiness index / gross national happiness, haute cuisine, Herman Kahn, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", job automation, Johann Wolfgang von Goethe, John Bogle, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Michael Milken, Mikhail Gorbachev, Milgram experiment, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, Phillips curve, planned obsolescence, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, Reminiscences of a Stock Operator, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk free rate, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, stock buybacks, survivorship bias, tail risk, Teledyne, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, two and twenty, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

Emanuel Derman (2004) My Life As A Quant: Reflection on Physics and Finance, John Wiley, New Jersey. 4. Berkshire Hathaway Letter to Shareholders (2002). 5. Martin Z. Braun, Darrell Preston and Liz Willen “The banks that fleeced Alabama” (September 2005) Bloomberg Markets; William Selway and Martin Z. Braun “The fleecing of Alabama: the bills come due” (July 2008) Bloomberg Markets. 6. In a Dutch auction, the auctioneer begins with a high asking price that is lowered until some bidder accepts the auctioneer’s price, or a predetermined reserve price (the seller’s minimum acceptable price) is reached. The winning bidder pays the last announced price. The name derives from its use during the Dutch tulip bubble. 7.

Between Silk and Cyanide: A Codemaker's War, 1941-1945 by Leo Marks

anti-communist, Bletchley Park, British Empire, disinformation, Dutch auction, full employment, mandatory minimum

Having achieved more without SOE's help than most freedom fighters with it, he decided that his only chance of getting arms, supplies and working capital would be to join forces with one of London's Big Battalions, and he escaped to England via Lisbon in 1941 to make a first-hand assessment of the relative merits of SOE and Duke Street. His arrival in London was the start of a Dutch auction (without Giskes, thank God) between de Gaulle and Buckmaster, who interviewed him personally, each determined to recruit him on the spot. But in reality it was Moulin who interviewed them, and he kept them in suspense for several weeks before announcing his decision (he was an experienced politician).

The Victorian City: Everyday Life in Dickens' London by Judith Flanders

anti-work, antiwork, centre right, Corn Laws, Dutch auction, it's over 9,000, John Snow's cholera map, Ralph Waldo Emerson, traveling salesman, urban sprawl, working poor

Crowds gathered by each auctioneer as the porter set out plaice, sole, haddock, skate, cod, ling and ‘maids’ (ray) in doubles – oblong baskets ‘tapering at the bottom, and containing from three to four dozen of fish’ each – while sprats were sold by the tindal – a thousand bushes – or in offals, which held ‘mostly small and broken’ fish, to be sold off cheaply. No examination was permitted, the porter hefting each double on to his shoulder as all over the market bidding began by Dutch auction, with the auctioneer setting a high opening price, then dropping down by increments until someone made an offer. Each type of fish was sold first to the ‘high’ salesmen, who bought in bulk and then sold on to middlemen, known as bummarees, at whose stands the doubles and tindals were broken up and the contents sold off in smaller quantities to individual shopkeepers or to costermongers.

The Blank Slate: The Modern Denial of Human Nature by Steven Pinker

affirmative action, Albert Einstein, Alfred Russel Wallace, anti-communist, behavioural economics, belling the cat, British Empire, clean water, cognitive dissonance, Columbine, conceptual framework, correlation coefficient, correlation does not imply causation, cuban missile crisis, Daniel Kahneman / Amos Tversky, Defenestration of Prague, desegregation, disinformation, Dutch auction, epigenetics, Exxon Valdez, George Akerlof, germ theory of disease, ghettoisation, glass ceiling, Gregor Mendel, Hobbesian trap, income inequality, invention of agriculture, invisible hand, Joan Didion, language acquisition, long peace, meta-analysis, More Guns, Less Crime, Murray Gell-Mann, mutually assured destruction, Norman Mailer, Oklahoma City bombing, PalmPilot, Peter Singer: altruism, phenotype, plutocrats, Potemkin village, prisoner's dilemma, profit motive, public intellectual, QWERTY keyboard, Richard Feynman, Richard Thaler, risk tolerance, Robert Bork, Rodney Brooks, Saturday Night Live, Skinner box, social intelligence, speech recognition, Stanford prison experiment, stem cell, Steven Pinker, tacit knowledge, The Bell Curve by Richard Herrnstein and Charles Murray, the new new thing, theory of mind, Thomas Malthus, Thorstein Veblen, Timothy McVeigh, twin studies, Tyler Cowen, ultimatum game, urban renewal, War on Poverty, women in the workforce, Yogi Berra, zero-sum game

The editors assumed that words register in the brain with their literal meanings, so that an invalid is understood as “someone who is not valid” and Dutch treat is understood as a slur on contemporary Netherlanders. (In fact, it is one of many idioms in which Dutch means “ersatz,” such as Dutch oven, Dutch door, Dutch uncle, Dutch courage, and Dutch auction, the remnants of a long-forgotten rivalry between the English and the Dutch.) But even the more reasonable attempts at linguistic reform are based on a dubious theory of linguistic determinism. Many people are puzzled by the replacement of formerly unexceptionable terms by new ones: Negro by black by African American, Spanish-American by Hispanic by Latino, crippled by handicapped by disabled by challenged, slum by ghetto by inner city by (according to the Times) slum once again.

Valuation: Measuring and Managing the Value of Companies by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer, Franziska Manoury

accelerated depreciation, activist fund / activist shareholder / activist investor, air freight, ASML, barriers to entry, Basel III, Black Monday: stock market crash in 1987, book value, BRICs, business climate, business cycle, business process, capital asset pricing model, capital controls, Chuck Templeton: OpenTable:, cloud computing, commoditize, compound rate of return, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, currency risk, discounted cash flows, distributed generation, diversified portfolio, Dutch auction, energy security, equity premium, equity risk premium, financial engineering, fixed income, index fund, intangible asset, iterative process, Long Term Capital Management, low interest rates, market bubble, market friction, Myron Scholes, negative equity, new economy, p-value, performance metric, Ponzi scheme, price anchoring, proprietary trading, purchasing power parity, quantitative easing, risk free rate, risk/return, Robert Shiller, Savings and loan crisis, shareholder value, six sigma, sovereign wealth fund, speech recognition, stocks for the long run, survivorship bias, technology bubble, time value of money, too big to fail, transaction costs, transfer pricing, two and twenty, value at risk, yield curve, zero-coupon bond

smaller programs, companies typically buy their own shares at no premium or a limited premium in so-called open-market purchases. Larger programs are often organized in the form of tender offers in which companies announce that they will repurchase a particular amount of shares at a significant premium. See, for example, R. Comment and J. Jarrell, “The Relative Signaling Power of Dutch-Auction and Fixed Price Self-Tender Offers and Open-Market Repurchases,” Journal of Finance 46, no. 4 (1991): 1243– 1272; and T. Vermaelen, “Common Stock Repurchases and Market Signaling: An Empirical Study,” Journal of Financial Economics 9, no. 2 (1981): 138–183. 29 See B. Jiang and T. Koller, “Paying Back Your Shareholders,” McKinsey on Finance, no. 39 (2011): 2–7. 30 See B.

Applied Cryptography: Protocols, Algorithms, and Source Code in C by Bruce Schneier

active measures, cellular automata, Claude Shannon: information theory, complexity theory, dark matter, Donald Davies, Donald Knuth, dumpster diving, Dutch auction, end-to-end encryption, Exxon Valdez, fault tolerance, finite state, heat death of the universe, information security, invisible hand, John von Neumann, knapsack problem, MITM: man-in-the-middle, Multics, NP-complete, OSI model, P = NP, packet switching, quantum cryptography, RAND corporation, RFC: Request For Comment, seminal paper, software patent, telemarketer, traveling salesman, Turing machine, web of trust, Zimmermann PGP

A group of people can conduct a secret auction over a computer network. They arrange themselves in a logical circle, and through individual pairwise comparisons, determine which is offering the highest price. In order to prevent people from changing their bids in mid-auction, some sort of bit-commitment protocol could also be used. If the auction is a Dutch auction, then the highest bidder gets the item for his highest price. If it is an English auction, then he gets the item for the second-highest price. (This can be determined by a second round of pairwise comparisons.) Similar ideas have applications in bargaining, negotiations, and arbitration. 23.15 Probabilistic Encryption The notion of probabilistic encryption was invented by Shafi Goldwasser and Silvio Micali [624].