Evil ether auction

Thinking about the game theory behind PRIA has taken up most of my thoughts lately, and I recently had an idea that I wanted to jot down quickly.

A recent Bankless post send me down a series of links to the diabolical dollar auction, which is also called an all-pay auction. It’s actually quite evil. The only way to win is not to play, otherwise, players will wind up overpaying. There are variations on this, depending on whether you have one player or just two, or if all losing bids get paid or whether just the the top two. There’s also a variant where the bidders have to pay a fee to bid. In all of these variations, the winner is usually the one running the auction.

A cursory search shows several variations on auction contracts in Ethereum, including a way to do a blind one. However, I couldn’t find any examples of anyone implementing such a contract in real life.

So, is it possible to arrange an ether auction? Yes, I’m fairly certain. Would it work, maybe. It might even be possible to create an auction factory that creates a new auction after the last one is done, spawning a new auction and siphoning off gas from the bids each time someone interacts with it. Would it be ethical?

Probably not.