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How to Win on Ebay: Snipe
grammar fascist writes "A study by South Korean physicists confirms what some of us have taken for granted for a long time: a single bid at end of auction nets the most wins. From the article: 'Plugging all those data into the model and testing the outcome in terms of how the auctions turned out, the team found that the probability of submitting a winning bid on an item indeed drops with each bid. "Our analysis explicitly shows that the winning strategy is to bid at the last moment as the first attempt rather than incremental bidding from the start." The study appears in the current Physical Review E journal.'"
Proxy bidding is supposed to allow easy auctions with fairness. The problem is the sniping phenomenon. And there is an easy fix: A bid will extend the auction by ~10 minutes if received in the last 10 minutes. Voila, no more sniping.
Test your net with Netalyzr
but I bet this is the best strategy to result in lowest prices at the end of the auction and this is the strategy I've been using for the past six years to win and keep the costs to a minimum.
You can't handle the truth.
should i wait to say "First Post" 7 days from now?
guns kill people like spoons make Rosie O'Donnell fat.
. . . East Ukrainian dentists declare in their recent study that "Manned spaceflight is more difficult than they thought."
(Seriously . . . shouldn't physists be studying . . . I dunno . . . physics?)
First off, we needed a study to tell us this? Second, these were physicists? Pardon me if I'm not seeing the physics in online auctions.
If this story were on Fark.com, I think it would merit the 'still no cure for cancer' tagline.
If you bid more than once on an item, someone must be bidding against you, so of course your chances are reduced.
If you only bid once on an item, it could be the only bid. I wonder if they controlled for that.
Fellowship 9/11
Ebay allows users to set their secret maximum bid, so in a rational world a bidder just sets this at the highest price he's willing to pay. However, rational thought has nothing to do with markets (except in economics textbooks, for some reason), so people keep ratcheting up their maximum bid to win. The result is that the "max bid" system doesn't perform as it was intended, but it was a good idea.
Not the first good idea to be defeated by irrationalism, and not the last.
Use the Firehose to mod down Second Life stories!
People like to bid based on even dollar amounts. I've won auctions by bidding 2-3 cents more than the even dollar amount.
For example, if you want to bid $20 for something, bid $20.02 instead so if somebody else puts a bid of $20 on it, you still win.
The acutal paper is from 2000. This has been tought for the past 3 years in an undergraduate eCommerce course.
The paper has an interesting comparison between eBay and Amazon, for two distinct cases: common value and private value.
Make even shorter URLs - 8LN.org
I've been sniped many times on EBay auctions, and it doesn't really bother me at all -- there is automatic bidding that will increase your bid to your maximum if someone tries to snipe you. In the end, they valued the item more than I did.
But why doesn't EBay operate like flesh-and-blood auctions? Keep the bidding open for the normal duration of time, but then extend the auction time whenever a new bid is placed? You know, like "going, going, gone!" Fairly easy to add 3 or 5 minutes to the end of an auction -- and those who haven't set incremental bidding can still get in on the close if they want to.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
That's a very good idea. (The more I think about it the more I like it.) There is a problem, though, in that it will not help out folks who live in different time zones. If the auction ends at a time when I would rather be asleep then the extra 10 minutes will not help. The bidders on ebay are spread out over a very large geographic region which makes it difficult to insure some sort of fairness about the end time of an auction.
Studying ebay counts as physics in South Korea?
What's the probability of overpriced shipping?
What?
1 Snipe eBay auctions
2 ?????
3 Profit!
Actually, I have a forumla that gives the best chance of winning an auction: bid 10x what the item is worth. Can I have some money to study the obvious^H^H^H^H^H^H^H^H research the tricky questions of our age now please?
The fact that this was tagged as duh before it had any comments is very telling.
If all you have is a grenade, pretty soon every problem looks like a foxhole -- MightyYar
Proxy bidding is supposed to allow easy auctions with fairness. The problem is the sniping phenomenon. And there is an easy fix: A bid will extend the auction by ~10 minutes if received in the last 10 minutes. Voila, no more sniping.
Yahoo! Japan already does something similar... I think its 15 minutes. Makes things much more fair for the seller.
-FL
Heisenbidding: You can know how much you will pay, OR if you'll get the item or not, but you can't know both.
If you put in the maximum you are willing to pay for it at the start, you can't be sniped.
Great in theory, but what about time sensitive items? Ala tickets? I often bid on (and sometimes win) tickets off of ebay, and sometimes I win and get delivery (electronic tix) just hours before an event.
I am become Troll, destroyer of threads
... unless the item has a 'Buy It Now' button.
Technoli
Wouldn't eBay's automatic bidding prevent that? If you were willing to bid $20 and it was currently at $10, th esniper needs to bid $21 to win, which is in theory more than you were willing to pay. Personally I'm suspicious of such tools, but the idea is in the event of a tie the earliest bidder wins, right?
You are in a maze of twisted little posts, all alike.
How is this such a problem? I don't really get what is not "fair" about sniping?
If the dumbasses that got their auction "stolen" at the last minute didn't put in the absolute maximum that they wanted to pay for the item, then that's their own fault. Either your willing to pay more than anyone else or your not. If you don't put your maximum bid in straight off and keep incrementing your bid, you are really just engaging in really inefficient sniping.
Adding a ten minute extension wouldn't really solve this. It would work great for sellers because the emotionally invested bidders would run up their bids more than they otherwise would. The buyers however would be better off just joining the snipers rather than fighting them. If everyone sniped it would basically revert to the pre-sniping days.
Sniping works when people don't actually know what something is worth. Every time you make a bid, you literally raise the price of the item: you declare that it's worth at least this much to you. And if nobody knows what the price is, they know that it's worth a little bit more when you raise the price.
By sniping, they lower the final price by hiding the information of what they're willing to bid. The auto-bidding feature is supposed to do that for you, but information still leaks out: it tells you the value of the second-higest bid, which is probably close to that of the highest bid. It's a good proxy of the actual price, and you're raising that.
Personally, I don't get too bugged about the snipers. I know what it's worth to me and let the auto-bidders handle it. If I get sniped, it means they were willing to pay more than I was. The seller gets screwed a bit, because the sniper was hiding their willingness to pay more (and therefore probably more than they ended up paying.) But the only thing being done to me as a bidder is that I got my hopes up.
So I don't get my hopes up, and I don't bid on eBay for anything I really, really want. I use eBay not for its auction, but for its flea-market: the ability to get stuff I can't get elsewhere. I usually just pay the "buy it now" price.
You hardly need a scientific study to realize sniping is going to be more successful than incremental bidding -- you eliminate the opportunity for a counter bid, and if you are careful you can leave yourself just enough time to make one additional incremental bid without exposing yourself much to other bidders. Sniping isn't such a bad thing for the following reason:
Your solution would certainly appear to be of benefit to sellers on the surface, but it would stike a blow against one of the main attractions of EBay -- the chance to snag a deal! EBay is unlikely to add a feature that reduces the number of bidders it attacts, because this would hurt EBay and the sellers far more than a bit of sniping.
Well, there you have it...like most things in life, you gotta figure out what you want and how badly.
If there is something I really want, I've set my alarm to wake up just to bid on the item...and crash back again after it is over.
I see nothing wrong with sniping. If you have set your bid to the absolute maximum you are willing to pay, and not a cent more...if no one snipes it at that $$ amount...you will still win. If someone outbids your bid at the last second...well, in your mind you should say.."They paid too much for that..."
This works pretty closely to a live auction. People can keep bidding till the hammer drops. Sure, it keeps going while bids keep coming in, but, that is the little difference between eBay and a live auction. At least with eBay you CAN win and don't HAVE to be there live.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
robnator's a bit slow... if everyone snipes to win auctions, what's the trouble? If you really wanted it, you'd snipe with bids like $1000...
thing with the auction concept is you're SUPPOSED to bid what you'd like to pay if no one else is running up the price (rinse. lather, repeat) until you reach your wallet's limit. eBay's modification imposes a time limit to keep auctions from taking forever, but with the maximum bid concept it brings its 'auction' back towards the original.
the reason people snipe (vs. just bidding their personal maximum to start) is fear of being run up by shills. it's a survival mechanism for your money, if such a thing isn't self-contradicting on eBay...
"If...you can't be a good example, then you'll just have to be a horrible warning" - Catherine Aird
Keep in mind that "winning" an auction only means that you're willing to pay more for something than anyone else...
Well, the buyer has to
pay more, but getting sniped at the end of the auction you really wanted sure sucks, so in that way the buyer
wins.
If you "really wanted" the item, why wasn't your maximum bid price higher?
When I buy something on eBay, I always bit the most I'm willing to pay for the item. The items I win are usually nowhere close to what my maximum bid could have been, and the items I don't win sold for more than I was willing to spend.
Snipers cost people like me nothing. The only way they can hurt you is if you are compulsive spender who suddenly wants something even more just because somebody else was willing to pay $1.50 more than you originally thought it was worth.
Information wants to be anthropomorphized.
As the article says, sniping will only help you if the bidder you're trying to beat was willing to raise his own bid but didn't have the chance. This will only happen if the bidder you're trying to beat is inexperienced, stupid, untrusting of the automatic bid system, etc. However, since many such people bid on ebay, sniping certainly helps from time to time.
eBay has certainly considered and rejected this idea. If this were an auction type offered on eBay, every rational seller would choose it.
The reason it's not offered is that eBay is more dependent on bidders than sellers at the end of the day. Yes, sellers pay the fees to eBay, but sellers are less mobile than buyers - if a seller is not going to use eBay, what will they use? No other auction site has traffic within an order of magnitude of eBay. Most sellers' only other rational option is a local fixed-price sale through, e.g. craigslist - not an acceptible option to many sellers. Thus, how the sellers feel about sniping is immaterial to eBay - they're the only game in town and the sellers will come anyway.
OTOH, buyers care less about where they buy things than sellers do about how they sell them. Change the rules on eBay at this point and they will alienate their base of idiots^Wbuyers - the traffic that keeps eBay the only game in town. They already have a major fraud problem that's driving sales of some especially fraud-prone categories like computers and electronics to sites focusing on local cash deals like craigslist. The last thing they want is to change anything else that might alienate buyers.
(Yes, some buyers hate sniping, but most buyers hate bidding wars even more. Anything that helps sellers raise their average sale price hurts buyers, and since the buyers are what bring in the sellers...)
-Isaac
I am not a lawyer, and this is not legal advice. For Entertainment Purposes Only.
It becomes psychological. I'm an armchair sniper for everything I do on eBay for the following reasons: 1 - People get emotionally invested in auctions for items they really want, especially eBay newbies. By competing with them, you are goading them into increasing their maximum - which screws you as much as it screws them. When the competitive spirit is introduced your price jumps up. 2 - Normal non-sniping bidders most likely will not be watching the final seconds of an auction, so you deny them the opportunity to revise their bid and possibly outbid you; again, this comes down to the competitive spirit and peopel going "weeeeeeell, I suppose I can pay $30 instead of $25..." 3 - As other poster suggests, you hide the true value of something. Most seasoned eBay users will simply go to identical past items to get a bead on what to expect, but often I see auctions go *above* MSRP. You do not want to give away what you're willing to pay for it until you absolutely must.
South Korea!
First they had a veterinarian who claimed to clone the first human!
Now they have a PHYSICIST who claims to be an expert on EBAY AUCTIONS!
Next up: a lawyer who can communicate with dolphins!
Yay Korea! Insane on both halves of the peninsla!
There is no global warming, and only environazis dislike petroleum-based fuel sources. Why do you hate America? The article is about making money and creating the illusion that you got a good deal by "beating" the other guy. Can we please get back to talking about what makes America great, and stop focusing on trendy extremo-far-far-really-left-wing fear-mongering? Why do you want to kill babies? You are a bad person!
Wow, I actually do feel a little better. Maybe there's something to that after all.
That's what I've always thought too. The people who come in and snipe at the last minute always end up paying more than I would have for the item because I set my one bid to what I'm willing to pay and then leave the auction alone. While this means I don't get as many items as the snipers, it also means that I don't end up paying more than retail for an item like far too many ebay users I've seen. Unless you're bidding on an game system on the day it's released or something crazy like that, I'd prefer to wait until a good deal rolls around instead of overpaying for my item just to make sure I get it.
I read the internet for the articles.
I have heard that Idea before, and it seems to be a win win for everyone, why won't ebay chage their model?
From my perspective, I don't like that model because I know how much it will inflate the price of items on eBay. The reason I snipe is because I learned years ago that people get attached to the particular item they're bidding on, and if given the chance will end up ratcheting the price well beyond what it's actually worth because they got caught up in trying to win.
If eBay implemented a system like you describe, I think that while they would make more money from each auction, total use of the system would decline because most people aren't interested in paying high prices.
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman
That is why it is always worth bidding an oddball amount slightly higher than your target bid, like $20.53 instead of $20 even.
It sounds like one of the basic assumptions of this article is that the object of ebay is to win. That's an incorrect assumption: the object of eBay is to get what you want at the lowest price you're willing to spend. If you're only willing to spend $25 on an iPod, put in a bid of $25. eBay's proxy bidding will handle the pissant bidders trying to nickel and dime their way up. Eventually one of two things will happen: A) you'll be the high bidder and get the item you want for a price less than or equal to the amount you wanted to pay, or B) someone will outbid you and you won't get the item at the price you want, at which point you can either let it go or re-evaluate the amount you're willing to spend.
People get caught up in the "game" of bidding on eBay which is how you see digital cameras that retail for $299, and sell on Amazon for $240, sell on eBay for $320 -- that's an example I've seen with my own eyes. People are stupid and so sniping is effective.
rooooar
But the problem with this is that you never win the item. If you still just bid the one amount you're willing to pay, but you do it with a snipe, you're much more likely to actually get the auction item. Using a snipe program like jbidwatcher, it's just as easy to snipe as it is not to, so why wouldn't you?
Schrodinger's Bid:
You either won the auction at the moment you placed your bid, or you lost. Until you view the auction results, both are true.
Oh yeah, also, you were bidding on a cat that was possibly gassed to death.
Fermi's Bid:
As long as your result is within an order of magnitude of the highest bid, you win.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
"A study by South Korean physicists confirms that people can in fact make money out of stating what is blatantly obvious to everyone"
No. In the event of two "most money"s (of identical size), the earlier bid wins.
I'm still trying to figure out why "putting in the max value you mean to pay as soon as possible" is not the optimal strategy. I don't eBay much, but I don't get sniped, because I do this. All sniping does is raise the amount I have to pay (but still at or below my max) at the last minute in a way I completely expect, or causes the amount to go over what I'm willing to pay, in which case I shrug and move on with life.
This whole sniping thing is one of the larger gigantic wastes of time and fury I can think of. Use the system as designed and it all works.
Yeah, the auto-bid can prevent it, but only if the sniper bids too low, and too close to the end of auction to up his bid again. Has happened to me.
I admit I'm a sniper. I bid on ebay in either one of two ways.
Either I set my auto-bid at the maximum amount I think that item is worth and let it go (and if I get sniped, oh well).
Or, I set the auction on watch and then bid the max I want to pay for it within the last 20 seconds or so.
This way I never pay more than what I want, and sometimes get a pretty good deal. I see nothing wrong with it at all. I don't need any special software or tools to win, I just stay attentive and watch my items. Anyone else can outsnipe me at the same time. It's happened several times. I don't get bent out of shape over it. I just look for another one.
Adding a ten minute extension wouldn't really solve this. It would work great for sellers because the emotionally invested bidders would run up their bids more than they otherwise would. The buyers however would be better off just joining the snipers rather than fighting them. If everyone sniped it would basically revert to the pre-sniping days.
But think about a real auction: If the auctioneer says "going once...twice..." the item doesn't just go to the person who threw up their paddle at the last moment. It gets extended for another five seconds or so. Now, maybe the same dynamics don't work in the web world, but at least it puts perspective into it.
What if eBay also had another auction type in addition to normal and Buy It Now ones: silent auctions. It tells you when it ends, the seller may optionally give a reccomended amount, and you get to put in your bid, without knowing what anyone else put down. Now you'd be more compelled to put your maximum bid down.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master."
A+A+A+AAAAAAA++++++ Great article, would read again.
you get a lot of people who really wan't the item but have set a budget, by bidding early you get theese people caught in the heat of the bidding action and encourage them to bust thier budget.
the result is they overpay for the item and you don't get it at all, the only winner is the seller.
sniping does not encourage this behaviour as by the time they see thier outbid its too late.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
Because not everyone snipes, and not everyone bids their maximum. Most of the time, if you bid your max amount earlier, someone who was beaten will rethink and place a second bid. If you bid with a second left, the impulse people can't do that.
But what is that maximum?
If there's an item that you're willing to pay up to $10 for, you would probably still take it for $10.05. If it's one that's worth $10.05, you'd probably still consider it a pretty good deal for $10.10. That's where proxy bidding fails, because in the end, unless you enter a massively overpriced proxy bid, you're just going to be sniped by some other guy by 5 cents.
Every buyer with any brains at all figures out sniping is the way to go. I have been a seller for over 5 years, and I make more money on my auctions when I have them end on a Sunday afternoon. More people are home, near their computers, and ready to snipe at that time. I don't ship internationally (too much fraud), so time zones aren't really an issue.
I often get no bids at all up until the last 30 minutes of an auction, when 10 or 20 can suddenly come in.
"The advanced societies of the future will be driven by competing systems of psychopathology." -JG Ballard
Everyone with a brain is agreed that a single maximum-price-you-want-to-pay bid is the best policy.
Your problem is that you don't realise that there are a lot of nonlogical people out there, who don't bid their maximum price, but put in a bid, then if they see they've been outbid, put in another one and so forth. To minimise the inflationary effect of those fools, bid as late as possible, not as early as possible.
That's why sniping is the smart move. It's not the snipers that are the cause of the "problem", it's those incremental bidders. Snipers are just keeping your price DOWN (despite all appearances to the contrary) to the benefit of all bidders...
You got caught up in the game of 'obtaining the product'. You do not go to an auction to obtain the product. You go the STORE to obtain the product. Anyone can "obtain the product" at any auction. I can beat your silly Snipig strategy simply by offering 10 times the value of the product as my max bid.
Only a fool would do that you say? Of course. Any strategy that is the 'best strategy to win an auction is by definition something only a fool would do. That is the nature of auctions. When you go to an auction the point is NOT to obtain the product.
Instead the point is to get the product at a CHEAPER price than standard
Any time there are people out there sniping on a product than whoever wins the bid is BY DEFINITION THE LOSER, not the winner.
I used to hate being sniped, but then I fell in love with it - it protected me from over-paying for something.
The real way to 'win' at the auction is instead to find a product that has so little interest that people are not sniping. You also generally have to totally avoid 'business' sales and look for the UN-professional, individuals doing the selling. Key things to do are to look for mis-spellings, and poor pictures.
excitingthingstodo.blogspot.com
Then $10.00 wasn't really a maximum value was it? The fault would be yours for not bidding $10.05 in the first place. If you bid your absolute maximum amount on every auction, then when you get outbid you won't feel bad for losing the auction.
Works for me - I see something I like, then I bid my max and forget about it. If I get an email later saying that I won the auction, I go back and pay. I turn off those uselsss "you have been outbid" emails.
I used to work for a on-line auction company (not eBay, a "Business to Consumer" one). We did implement this logic,
where the auction would extend 10 minutes after the last bid. Most of the profit on items came during this "extended"
period of time, and the bidding could get quite furious.
From a technology view-point, this made the closing auction logic complicated (which then affects category pages and
search results).
From eBay's perspective they've already captured the listing fee, and the 10-20% movement in price achieved by
extending the auction nets them (eBay) only a few more pennies on their percentage of selling price, so why
would they bother? It's the same tension as real-estate agents - they'd rather get a $100,000 sale 10 days into
a home's listing than a $120,000 sale 60 days in e.g. a $5000 (assuming 5% commission) at 10 days than $6000
at 60 days. Can you blame them?
-Slak
Look, what would have happened if they also tested the "Moron's Ebay Strateg". That strategy is simple - offer 10 times the actual value of the item. See a computer worth 2,000? Put in a Max bid of 20,000.
Guess which strategy 'wins' the auction?
The study is flawed, it asked the stupid question, not the smart one.
If you want to BUY something, go to the store.
If you want to "Pay less money than at a store", then go to Ebay, and DON'T TRY TO WIN THE AUCTION.
If you consistently win the auction, that means you paid too much money for the item.
Instead, keep using the "Put the max value you will pay", and do it in the RIGHT auctions.
How to find the right auctions?
Look for NON-businesses. (They put in a floor and are just wasting your time 90%) Look for mis-spelled products. And look for things that have few bidders. And be ready to LOSE MOST of the biddings to fools that paid too much. And be ready to accept a product that is not exactly what you wanted, but satisfies your needs for much less than what you expected to pay.
excitingthingstodo.blogspot.com
I have read that if eBay were to implement this rule, then eBay would fall under more U.S. states' auction regulations.
Isn't this how eBay already works?
Not so. Snipers are perfectly logical. YOU might set your max-price-you're-willing-to-pay but there are hordes of ebayers out there who bid incrementally. Snipers just bid the max-price-they're-willing-to-pay for the item, just like you, but they do it as late as possible so as not to give the nonlogical incremental bidders the chance to outbid them. This means they've got more chance of getting the item and they're likely to get the item for less.
It's got nothing to do with 'beating the other guy' or 'resorting to sniping' or 'winning is the only goal' or any nonsense like that. It's just the optimal strategy for maximising the chance of winning and minimising the price paid for the item.
"My counter-claim, equally unsupported, is that if everybody bidded my way, the final price of the auction goods would be insignificantly different."
Possibly true. But not everyone bids your way. That's the problem.
"I don't believe they have an inflationary effect. That effect is illusion. The "real price" is not the "current winning bid", it's "the highest someone will pay for it". Sniping has no effect whatsoever on the real number."
Do you believe in the existence of incremental bidders? Have you seen someone bid in ebay and then get outbid then bid again? Have you seen someone put in lots and lots of little bids until his latest one just outstrips the maximum bid.
If you change your statement to: The winning bid on ebay is the highest that someone will pay for it, *if they put their maximum bid in on time*, then I'll agree with you.
Then I'll agree with you. The thing is, that the incremental bidders obviously aren't always placing their maximum bids. Sniping is just a way of making sure that they're less likely to.
"There are enough irrational bidders to push every item 5-10% over what I'd bid for them, because to them winning itself has value and it doesn't to me; I just want the item."
Sniping's job is to cut some of those guys out of the game, because the irrational bidders (the ones who will bid just-a-bit-more-than-the-other-guy) don't have a chance to irrationally bid.
Funnilly enough, I stopped ebaying ages ago too...
The thing is, even if one bids the absolute maximum one can pay, 10 cents more is still just 10 cents more.
Unless you happened to bid your entire economy on an item, you'll always be able to afford 10 cents more with no problem whatsoever.
Beware: In C++, your friends can see your privates!
Sure you'll win it. If you decide you want to pay $20 and bid $20 early on, your bid has priority over someone else who bids $20 or less later. If someone else wins the item, they will have paid more than you were willing to pay anyway, so you wouldn't have wanted the item. So your point is what, exactly? It does not have any bearing on the strategy being discussed. It's in your best interest to bid sooner if you know exactly what your upper limit is.
i am a soviet space shuttle
I've been thinking of adding something to my auctions saying "$2 discount if you bid before the last hour". Hence effectively implementing a "sniper fee" to discourage snipers--the idea being that by encouraging early bidders, you effectively raise the visible value of the item. Has anyone tried this?
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
In the big supply-demand chain, if you are bidding on high demand / low supply items then you'll get raked across the coals with last-minute sniping. But if you want tickets to tonight's Aerosmith, then that's what you're facing.
I'm into Magic cards (i.e. collectibles), where the bidding is often very different. For the most part e-bay doesn't have oodles of truly unique collectibles, just a few. If I'm looking for specific batch of Magic cards, I just set e-bay to e-mail me every couple of days when new auctions come up. When I find an auction I place my max bid and then I forget it. There's enough throughput on e-bay that I can just bid on the next one.
With a 50% variation on some similar auctions and various ending times (to foil snipers?), I don't have to watch over my bid. If I'm not getting my item for $X then I can raise my future bids or just keep trying. Again, these items are always coming up for auction, so this is ideal for the set it and leave it approach. Every once in a while, you'll even get a dead fish, where you're the only "real" bidder and you hit that 50% cheaper mark. I've bottom-fed a good part of my collection in this fashion.
In this case, the snipers just get their cards earlier (in exchange for paying more). And I stand the best chances of getting my goods for the price I'm willing to pay.
That is called a Vickrey auction. It has some theoretical advantages but for various reasons never caught quite on.
(has some theoretical diasadvantages as well, such as the possibility of stable bidder cartels iirc)
If you're willing to do to $101, then why not put that down as your max?
Before you put in your first bid, you should know EXACTLY how much you're willing to pay. And then you NEVER go past that amount.
But then you lose the ability to gauge the market.
Let's say, for example, that there is some old game on eBay that I want to buy. I really want it, and I'd personally pay $500 for one to get my hands on it. But, from the eBay past auction history, I see that they usually sell for about $100. Now I don't know about you, but if I know something usually goes for about $100, I'd rather pay about $100 and use the extra $400 on something else. (See that? I would pay up to $500, if that was what they sold for. But, since they don't, I'd prefer to pay less.) I would hate to be the person who won one for $475 when the ones the week before and the week after went for $100.
So I put my early bid in at the average selling price, about $100. If I see the price go up to $101 and it's less than a few hours before it ends, I might bump it up to $110. That's still well below my maximum, but it's reasonable to me. If it goes up to $115, I might bump it up to $120. Or, maybe by then another one is listed, and I'll move to it. Or, I'll see that I'm bidding against 5-6 others, and so I'll pass this one up and wait for the demand to die down. I can't do any of those things if I start out with a bid of $150 - maybe I'd lose it, or maybe I'd pay $149 when five more were listed during the week - oversupplying the demand - at $100 each.
What you suggest - bidding the absolute bank-breaking max that I might theoretically be willing to pay - would only work if A) people couldn't get friends to bump up their own auctions, and B) eBay let me, at any time, adjust downward the proxy margin I had previously placed on an item, so that I could adjust for market changes, without any penalty like those associated with withdrawing bids.
(Why don't I just snipe? I rarely remember to go back and check the items at the exact time of closing.)
It doesn't hurt to be nice.
Maximum is probably just above what you're comfortable paying. So if your "maximum" is 10, and you think "I wouldn't quite be comfortable paying 12 for this", bid 12.
The chances of it going right up to 12 and stopping are pretty unlikely. If you get it for less, you'll feel good about yourself. If you lose by 10 cents, then you're happy you didn't end up paying 12, since you weren't comfortable with that anyway. If you get it dead on 12, then it's a small loss - but it's the least-likely result. There's generally a narrow range between "worth it" and "uncomfortable paying this".
I'd rather have my max picked out ahead of time than bother with sniping. It's not a game, it's not hunting - it's a purchase.
Last post!
Regarding eBay sniping...
LAST POST!!!
What do you mean, someone posted after me?
Damn.
Hmmm...
Sniping only works if everyone else is sniping.
Au contraire. Regarding the final price, sniping only works if there are non-rational bidders. Rational bidders bid once and put in their (current) true maximum bid. Intelligent rational people do so at the last minute. If there are only rational bidders, sniping still provides a small advantage because you don't commit to an auction and can always switch to a different auction. But if there are also irrational bidders, the type of people who think that the maximum is a number that can be increased if necessary, then sniping also likely results in a lower price. Since the behaviour of these people depends on the other bids, not putting in your bid until right before the end means that you don't contribute to the amount that they're willing to pay. Since Ebay auctions are second-price auctions, their price is the price you're going to pay (unless another rational person outbids them), and every dollar that they bid lower is a dollar you save if you win the auction.
For many regular users of ebay, the purpose of ebay auctions is not to maximize economic profit on one single auction. The purpose is to maximize total economic profit across many dozens of auctions conducted over a long period of time. When you are a repeat participant, it can make sense to adopt a strategy which often leaves money on the table, as long as the same strategy has a small probability of winning a lot of money.
The effectiveness of sniping cannot be explained in purely economic terms; one needs a smattering of game theory. In pure economic terms, your strategy of always bidding your maximum leads to minimal risk: either you win the auction and pay less than your maximum, thus profiting the difference, or you lose the auction and do nothing. Obviously, under your strategy, you would always prefer to win the auction, since this is the only scenario that leads to profit. The problem with this strategy is that you are less likely to win the auction if you place your bid first, because
- Information is asymmetric: by revealing your bid first, you give other participants more information, and more information always helps their strategy (yes I realize eBay hides your true maximum, but nevertheless your bid leaks information -- if nothing else it leaks the information that you are participating);
- Other participants are irrational: The presence of your bid actually causes other people to bid higher than they otherwise would, for various unfathomable reasons which have no grounding in logic.
Because the impact of these problems (especially 2) is somewhat unpredictable and random, the bidding process resembles a type of prisoners dilemma, in which per-instance profit-maximizing play is often not long-term optimal. What makes eBay profitable for repeat buyers is the prospect of winning a small number of auctions at prices far far below the true worth of the items. The sniping strategy is the only way in practice to win an auction at a price dramatically below the true worth of the item, because if you bid your maximum at the outset then the other participants will respond (irrationally) in a manner that raises the winning price. In fact, ironically, the information asymmetry problem exacerbates the irrational bid-raising problem under the eBay auction model, since under this auction model one's true maximum represents a crucial piece of hidden information, and the only way to find out this information is to place bids yourself until you exceed someone else's maximum.For a repeat participant, it is rational and profitable to take the risk of losing (say) 10 auctions each at a price within $10 under the true worth of the item, in order to have a 1 in 10 chance of winning one of those auctions at a price $100 less than true value. Unless eBay changes their auction rules, sniping is and will remain the best way to maximize expected earnings across a large number of auctions.
If all of this doesn't convince you, then maybe the information asymmetry argument alluded to above will convince you. Since placing a bid reveals information to the other participants, you are always better off placing your bid as late as possible in order to minimize the information available to competing bidders. Doing so certainly never hurts you (if we ignore for the moment eBay's tiebreaker rules, whose effects are negligible, since the costs imposed by bidding second are less than the transaction costs of the sale), and it can sometimes help you if the other participants are irrational, which they are.
Ok, let's say I feel like paying $20 and bid $20 early. Then some newbie retard (ebay is full of them) comes and says, "Hmm, that guy thinks it's worth $20, so I'll pay $25". Ok, I've now just lost the item. Alternatively, nobody bids on it and newbie retard says, "I dunno, I guess I'll bid $10, since maybe I'll get it real cheap". At the last second I can then come along and snipe my $20, and win the item. Same $20 top bid, but I lose on the first auction and win on the second.
What? No. If I will pay up to $100 for an item on eBay, but the current bid is $10, then I'll enter $100. My bid will show as $12 or whatever minimum increment it is. If someone bids $20, my $100 bid trumps them and becomes listed as $22. If someone snipes in the last second at $50, I'll win the bid with $52 - without having had to pay any attention to the auction past my original bide. If someone snipes $102 in the last second, then they're paying more than I was willing to pay for the item anyway, and so should win the auction.
Why on earth do people bid over and over again, or wake up at a specific time? The eBay system is set up so you can put down the single bid you are willing to pay for an item. The automatic system does it for you. It doesn't show anyone what your maximum amount is; in fact the system is set up to the advantage of the buyer, because if I'm willing to pay $100 but the second bidder only bids $20, then the seller only gets $22 of what I was willing to pay and I keep the rest in my pocket. The problem with eBay is that people treat it as a conventional bid, believing for some reason that you should bid over and over again, just above the opposition. This is actually bad for the buyer, because it tends to draw people into bidding higher than they would originally peg as their maximum.
If you use the system as it is designed, then you cannot be "sniped". You can be outbid by someone who was willing to pay more than you, and it doesn't actually matter whether that happens a second after you bid or a second before the auction closes. If you're outbid, then someone was willing to pay more than you were; simple. However the masses simply do not comprehend this and continue bidding by the rules from another system, which are simply wrong here.
Sniping works against those who don't understand eBay.
Browsing with +2 to insightful posts and a higher threshold makes the average post seen seem a lot more ingenious
No.
You just proved his point beautifully. You obviously don't understand what's going on here.
Yes, in a perfect world, everyone would proxy bid like they're supposed to, and nobody would pay more than they're willing to pay for an item. Moreover, the person who was willing to pay the most, would win the auction.
But that's fantasyland. In the Real World(tm), there are two reasons why you should always snipe to get the best deal:
Example: your max bid on an item is $50. DumbJoe has already bid $30, hoping he'll get it for that. You come along and bid your $50 well before the auction ends. The new high bid is set at $31 by eBay's system. DumbJoe is notified that he's been outbid, so in the heat of the moment, he comes in and bids $40. Again, your proxy outbids him up to $41. DumbJoe decides he's not going to let you beat him, so bids $51. Oops, you lose!
Now, let's redo that with sniping. DumbJoe sits as the high bidder at $30 until about 20 seconds are left in the auction. At that time, you place your $50 bid. Price goes up to $31, auction ends, DumbJoe has no time to get caught up in the bidding war. You get the item, and at a damn good price, too.
Let's say many sellers are offering the item you wanted for a max of $50. You bid on the auction that DumbJoe is bidding, and he gets into his emotional bidding war. He drives the price up to your max of $50 before giving up. You win at $50, which is what you were willing to pay. No problem, right? WRONG.
Meanwhile, another auction ends a few hours later, selling the exact same item for $32. Oops! You could have saved $15-20 by either sniping on DumbJoe's auction, or deciding that its price had gone out of line with what the market was paying on other auctions for the same thing. You could take your time and wait for a relatively low-priced auction about ready to end and snipe that. The savings could be substantially below what your maximum price is.
Moral of the story: ALWAYS snipe. Lots of dumbass snipe because they don't understand the proxy bid system. Other dumbasses don't snipe because they don't understand their competition.
What? No. If I will pay up to $100 for an item on eBay, but the current bid is $10, then I'll enter $100. My bid will show as $12 or whatever minimum increment it is. If someone bids $20, my $100 bid trumps them and becomes listed as $22. If someone snipes in the last second at $50, I'll win the bid with $52
You bid $100. It shows as $12. A stupid kid comes along, and bids $15. Your bid goes to $17. The kid bids $20. Your bid shows up as $22. After a while the kid bids $80 and your bid shows up as $85. You win and get to pay $85. Or the kid bids $105 and you don't get the item.
Now if you set up a snipe shot of $100 for that auction, the same kid comes along, bids $15 and leaves happily seeing his bid the highest. You win the auction and get the item for $17.
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It's a pretty standard finding. Bidder strategies will adjust to any changes in auction formats.
Standard English auctions, Dutch auctions, first price sealed bid auctions, second price sealed bid auctions all end up at pretty much the same price - they just get there by a different route. But English auctions (as well as second price sealed bid auctions) generally have the advantage of truthful revelation of valuation by the bidders.
You go on the auction 5 minutes before end, post your max amount 10 seconds before end and - either get it or not - often you time out till after auction end.
Now - if everyone does it that way and 10+ folks are posting at the last 10 seconds, it becomes a lottery.
The server has a certain processing time and does the bids sequentially - probably doing atomic locks on some auction resources. Well, there is a cutoff time where working off the queue stops - the highest offer wins at that point.
There are delays in bidding of up to 10 seconds at times - maybe they are doing it on purpose - add a random delay of a couple of seconds to every bidder the last 30 seconds before close? Internet does it by default anyway if the net is busy.
If the sellers are unhappy about the price they get - they can enter a minimum bid requirement.
With sniping it's the same auction principle as without - just in a much smaller time frame....