For example, I know many furry artists who open their commissions and within an hour get 20 solid offers to pay them. They can't possibly do all the work, so they just lose business.
That's, uh, not how capitalism works! Companies like Amazon know, all you have to do is charge 10x more to capture all of that value. Sure, it sucks for 18 other potential customers, but these furry artists have tens of thousands of fans who will enjoy the work regardless.
Great example of the power of auctions! It's amazing to see the Vickrey Auction come off the blackboard and enable an indie creator to connect with their community sustainably. Markets really are all about moving information so we can coordinate activity.
Wouldn't it be awesome for Kickstarter / Patreon to add this as a feature?
Reading more of it, it looks an awful lot like the business model behind YCH auctions-- Your Character Here. That's a very successful model, and it often results in prices $400+, which is about 2-3x more than what artists often charge otherwise.
That said, YCH is a more traditional auction over a single piece, not a Vickrey auction over a specific supply. According to this model, a Vickrey model would be:
- Scope the work to a specific standard that the artist specifies, in terms of colors, quality, characters, background, etc. That way, the bid is on a roughly equivalent amount of labor per piece.
- People put in (blind) what they're willing to pay
- When demand is exceeded, the nth+1 highest is what everyone pays.
Very fair!
I'd be curious if there'd be a way to price something more custom; for example, putting a price on the number of hours required for each feature (more color or shading, more characters, etc.), how would that affect such a pricing dynamic?
Does such an auction hold under the modification made for multiple participant?
Generally if you intentionally overbid you end up paying the otherwise highest amount discouraging that kind of action (ie you may as well put your max amount).
But if the top 10 pay the price of the 11th bid there’s a perverse incentive for me individually to just say I’m bidding $1 million because I know that most other players are likely to not be smart enough (at least in the short term) to bid strategically and thus I’m guaranteed to get the item at a steeper discount without having to reveal (or bother thinking about) my true max price for the item.
If you do that, there's a real risk you'll end up having to pay more than your max price. Say your max price is $2500, but you bid $1 million. Then it turns out 10 others have a max price of, and bid, $10000. You are now on the hook for $10000, significantly more than your actual max price.
Of course that requires some market analysis not a straight up "let's charge 20x". But when talking about limited capacity in general it makes sense that you overcharge to capture as much value as possible. Some customers are always willing to pay more so if you somehow know or can guess the distribution of offers it makes sense to capture everything from the most valuable buyer group down to whatever your capacity can cover rather than a random collection in the middle.
In the case of the M1 it might make sense to charge at these levels especially for customers that aren't interested in using anywhere near the full value of the product. So if a company or developer estimates it will only use the equivalent of 50% of the Mac's price it would be a better deal than purchasing the thing outright and also pay the associated operational costs. As always you have to know your market if you want to maximize the profit.
Not a furry artist but similar vein. There are genuinely a surprising number of people who are willing to pay 5 to 10x the market rate for commissions.
For example, I know many furry artists who open their commissions and within an hour get 20 solid offers to pay them. They can't possibly do all the work, so they just lose business.
That's, uh, not how capitalism works! Companies like Amazon know, all you have to do is charge 10x more to capture all of that value. Sure, it sucks for 18 other potential customers, but these furry artists have tens of thousands of fans who will enjoy the work regardless.