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OT: Bidding


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Hi Stephen, Well if you're talking about Ebay and it's a very rare, desireable item that you and many others want and will pay most anything to get (within reason), then the person who bids a penny more than you the second before the auction runs out, wins. There are auto-bidding, "bot" software programs designed to work with Ebay that will do exactly that for you - although I've never tried them.

 

Not everyone subscribes to your philosophy of setting a price and not going above it. There are plenty of people with more money than brains.

 

And even if it's not a rare item, it can pay to wait 'til the last minute or so just to see what others are willing to pay for it and if you're willing and able to hang with them, out-bid them by just a wee bit and thus win. Good luck!

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If I place a bid on an item, and another person outbids me and there is a week left in the auction, I have that much time to consider bidding again. If I am outbid in the last thirty seconds of an auction, I will frequently not be able to respond with a higher bid, assuming I wanted to.

 

Although the suggestion is that people enter their highest bid as their starting bid and let eBay automatically adjust the price as countering bids come in, most people don't do that. I don't. Why? I dunno. I don't want to, I guess. Takes all the excitement out of it.

 

Also, many folks make a meager living on eBay by putting in minimum bids on just about anything they think they can flip for more. If everyone assumed they were genuinely interested and were actually bidding some (hidden) maximum, nobody would bid against them, and they'd get the item for a dollar or whatever the minimum bid happens to be. I've won many auctions by bidding $1.01 or $1.51 in the last ten seconds of an auction - the guy I was bidding against didn't really want the item, he just wanted to see if he could get it for a dollar and flip it back onto eBay with a better photo, description, etc to make some money himself.

 

I've never seen a televised car auction. What is that? I've been to many a farm or estate auction, and I'll tell you, it is easy to get caught up and bid more than you really wanted to when you started out. So what, it's fun, life is short and it doesn't hurt anyone.

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A televised car auction lasts a few minutes and is not run on a fixed schedule. The bidding stops when nobody will bid more. Online auctions have an end time which you can watch approaching second to second, and buyers, of course, want to pay as little as possible, so the price stays low until... well, you go figure.
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In a second price English auction, which is more or less what eBay implements, the rational bidding strategy is to bid the amount at which you value the item. In that way, you'll never pay more than what the item is worth to you and you stand to make a profit if the next highest bidder has a lower valuation. So in theory, as long as you bid your valuation, it shouldn't matter whether place your bid with 7 days left or 10 seconds left. Things are a little different for very rare or unique items (e.g. art), because bidders valuations will change based on the expected resale value of the item, which is affected by the price at auction.

 

Of course, in theory there's no difference between theory and practice, but in practice there is...

 

People will often diverge from this rational strategy either because they get caught up in the idea of "winning" the auction, because they revise their valuations updward as they see the price the item attains on the market, or because they want to slowly bid up to their actual valuation in order to maximize profits under the assumption that others aren't playing the optimal strategy.

 

For whatever reason, you see this behavior a lot on eBay and "sniping" or bidding at the last minute is a very common tactic that can be effective against non-rational bidders. So long as you snipe with a bid at your true valuation, you lose nothing: you won't overpay and you may prevent someone playing sub-rationally from out bidding you just to win.

 

You don't see sniping as much in traditional live auctions because bidding typically proceeds until there is only one high bidder, i.e. you're not on the clock. However, bidders will sometime not start bidding until many others have dropped out, again, in an attempt to minimize the rise in price caused by a heated competition.

 

Take a look at "Counterspeculation, auctions, and competitive sealed tenders" by W. Vickrey, The Journal of Finance, Mar. 1961 and "Auctions and bidding: a primer" by P. Milgrom, Journal of Economic Perspectives, Summer 1989 for more on auctions that you ever cared to know...

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Because other people do it.

 

So if you don't do that, then you won't ever win any auctions. Unless your rich and can walk

in and plop down way more than the item is worth.

 

Its a hard loop for someone like me with a busy schedule to be able to bid.

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There's another reason to snipe.

 

Some people are better at finding items I want on eBay than I am. I watch to see what they bid on and set up a snipe on the item at my reserve. If I win, fine, if not, equally fine, and I don't have to work hard at searching.

 

Some of these characters eventually figure out that they are under observation and learn to snipe themselves, preventing, um, scavengers from following them.

 

eBay is now hiding bidders' identities. This reduces somewhat the incentive to snipe by eliminating, um, scavenging. So much for the jackals and hyenas.

 

But as has been pointed out earlier in this thread, there are people whose base their valuation of an item on how many other people want it. Sniping discourages them.

 

Forrest, when I enter "theft stopping" bids ("If it is going to be stolen, I'll be the thief.") I rarely win. Which is fine. But when I want an item and have valued it fairly I often win. If you want to buy items offered on eBay, don't try to steal them. Offer more-or-less the going rate. And snipe if you don't want to signal interest. There's no reason not to set your bid up early. And there's no earthly reason to get emotional about items you don't own.

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I've won plenty of items at my price, which was below market value, but not at yard sale prices, where the owner has something which he/she knows nothing about, eBay is too well known for that. Except a lightly used $3000 Amp-Research full suspension bike for just over $400 (lightly traded). I did pick-up a pair of Leitz 6x24 Trinovids (from the first year for the line in 1963, confirmed by Leica, NJ) at a yard sale for $20 almost ten years ago, still have it.
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Stephen, the answer is simple - it's to preclude the possibility of another bidder responding with a higher bid. Saves me money. It can sometimes stop becoming involved in bidding wars before they start. Some people whine about getting sniped at the last second, but eBay's instructions have said for years to place a bid as high as you'll go for the item, then eBay automatically bids up incrementally to your maximum. The ending time isn't a secret, either. It's an auction, and if a given bidder gets outbid, tough - they should have bid higher.
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I have been very successful using auctionsniper on eBay. It is not part of eBay but independent of it. Go to www.auctionsniper.com to get detailed info. Basicall it works like this: You provide the item number and the maximum you want to pay at any time before the end of the end of the auction, as well as how many seconds before closing you want auctionsniper to submit your bid (2-3 seconds is fine and prevents that someone else has time to outbid you). If the bidding runs higher than you were originally prepared to bid, you can still modify your auctionsniper request. You don't have to be present, and the real beauty is that you don't show your cards. Nobody knows you are lurking in the wings. Of course there is no guarantee that someone else has bid higher than your auctionsniper maximum. There is a nominal charge for winning bids of around 1%. I think the first three snipes are free.
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