<html><body style="font-family: 'Helvetica Neue',Helvetica,Arial,sans-serif; font-size: 12px;"><div>Hi All,</div><div>For days and months we discussed auctions and ways to improve them. One thing we learned is that Vickrey auctions are inherently fair. They provide a process that encourages bidders to bid the price that is fair to them -- and set out exactly what they are willing to pay. They avoid collusion and unfair dealing. I thought we had agreed to recommend this method -- a sealed bid at the time of application. </div><div><br /></div><div>I want to reintroduce some of what we learned about Vickrey Auctions in our long discussions -- and why they are a trusted method of auctions among players large and small and with an array of resources. I think it is the very best way to ensure that smaller parties can prevail from time to time, and that the Global South can obtain a share of new gTLDs. </div><div><br /></div><div>Best, Kathy</div><div>-----------------------------------------------------------------------------------------------------------------------------</div><div><br /></div><div><h2>What is a Vickrey Auction?</h2><div><p>https://corporatefinanceinstitute.com/resources/knowledge/other/vickrey-auction/</p><p>A Vickrey auction is a sealed-bid
auction where bidders submit bids without knowing the bids of other
people. However, as opposed to other sealed-bid auctions, the price paid
is the second-highest bid price and not the winning bid price. The
Vickrey auction was named after William Vickrey, a Canadian who won the
1996 Nobel Prize in Economics for his research on <a href="https://corporatefinanceinstitute.com/resources/knowledge/finance/asymmetric-information/" class="tooltip-shortcode" title="">asymmetric information</a> in economics.</p></div><h3>Understanding a Vickrey Auction</h3><p>In a Vickrey auction, the
individual is bidding their true value and are not trying to assess what
everyone else is going to bid. Therefore, in a Vickrey auction, the
individual is bidding the maximum amount they are willing to pay and are
not disadvantaged by it.</p><p>By utilizing the <a href="https://www.researchgate.net/publication/228296863_How_Good_is_the_Generalized_Second-Price_Mechanism">second-price mechanism</a>
in a Vickrey auction, individuals bid truthfully – individuals are
motivated to bid their maximum value because the individual understands
that if their bid wins, they will only need to pay the second-highest
bid value.</p><p><br /></p></div><div><br /></div></body></html>