For those with an interest in auction theory, the Google IPO auction gives an interesting testbed for auction mechanism design. Instead of having an investmentMessage 1 of 1 , May 10, 2004View Source
For those with an interest in auction theory, the Google IPO auction gives an interesting testbed for auction mechanism design. Instead of having an investment bank set a fixed price for the IPO, instead Google will auction off the shares.
A New York Times article today describes many of the decisions and possible pitfalls of the various kinds of auctions Google might use. Also check out the Google SEC filing. One can learn quite a bit about auctions as well as the business of search engines from this rather informally written document. I have never had so much fun reading a prospectus.
My prediction: Great interest in Google will highly overvalue the stock whatever auction mechanism they will use. If you are interested in investing in Google, hold off until the price settles or you will suffer the dreaded "winner's curse."
Posted by Lance Fortnow to My Computational Complexity Web Log at 5/10/2004 07:22:40 PM