You could set a fixed fee, but then you’ll run out of visas by the end of the year.
It sounds like your fee is too low.
Seriously though, set the price as some function of remaining time and remaining items (example: p = C*d/n, where d is days remaining, n is items remaining, and C is a constant.) If someone wants multiple items, the price is just the sum of the prices for that many items purchased individually.
Or auction off the next year’s visas as a big batch auction. Everyone submits their bids over the course of the year, and at midnight 1 January the visa price is set to whatever clears the market. Every visa is allocated at the revenue-maximizing price, you know precisely when you will know and that you will be guaranteed a visa if you win, it is allocated to the most willing-to-pay applicants, etc.
The downside is that it increases latency by as much as a year (if you wake up at 12:01AM on New Years and realize you want to emigrate that year). You can trade away efficiency for latency by moving to more frequent auctions like quarterly or monthly, of course. Since the number of visas is so large (65k is far too small but is still ~200/day) you can probably move to daily auctions without losing too much efficiency.
Yeah I think in practice auctioning every day or two would be completely adequate—that’s much less than the latency involved in dealing with lawyers and other aspects of the process. So now I’m mostly just curious about whether there’s a theory built up for these kinds of problems in the continuous time case.
Nice idea. But if you set C at like 10% of the correct price, then you’re going to sell 90% of the visas on the first day for way too cheap, so you can lose almost all of the market surplus.
My thought was that you’d set C at your best guess clearing price or maybe a bit higher. You could instead go with 10x the clearing price and plan to not sell many before the last month but maybe get a bit more revenue overall.
It sounds like your fee is too low.
Seriously though, set the price as some function of remaining time and remaining items (example: p = C*d/n, where d is days remaining, n is items remaining, and C is a constant.) If someone wants multiple items, the price is just the sum of the prices for that many items purchased individually.
Or auction off the next year’s visas as a big batch auction. Everyone submits their bids over the course of the year, and at midnight 1 January the visa price is set to whatever clears the market. Every visa is allocated at the revenue-maximizing price, you know precisely when you will know and that you will be guaranteed a visa if you win, it is allocated to the most willing-to-pay applicants, etc.
The downside is that it increases latency by as much as a year (if you wake up at 12:01AM on New Years and realize you want to emigrate that year). You can trade away efficiency for latency by moving to more frequent auctions like quarterly or monthly, of course. Since the number of visas is so large (65k is far too small but is still ~200/day) you can probably move to daily auctions without losing too much efficiency.
Yeah I think in practice auctioning every day or two would be completely adequate—that’s much less than the latency involved in dealing with lawyers and other aspects of the process. So now I’m mostly just curious about whether there’s a theory built up for these kinds of problems in the continuous time case.
Nice idea. But if you set C at like 10% of the correct price, then you’re going to sell 90% of the visas on the first day for way too cheap, so you can lose almost all of the market surplus.
My thought was that you’d set C at your best guess clearing price or maybe a bit higher. You could instead go with 10x the clearing price and plan to not sell many before the last month but maybe get a bit more revenue overall.