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All potential buyers would submit how many stocks and the price they want to pay for them, then the submissions could be sorted from most to least expensive and sold at that submission price until there are no stocks left.
An auction of this sort actually incentivizes the buyers to underbid their valuation, in the hope of getting a bargain. With a single good to be bought, the game theoretically correct way to run the auction is to award the good to the highest bidder, at the second highest bidder's price [0]. It's more complicated for an auction of stock, but closer to what they actually do.
An auction of this sort actually incentivizes the buyers to underbid their valuation, in the hope of getting a bargain. With a single good to be bought, the game theoretically correct way to run the auction is to award the good to the highest bidder, at the second highest bidder's price [0]. It's more complicated for an auction of stock, but closer to what they actually do.
[0] https://en.m.wikipedia.org/wiki/Vickrey_auction