[GreenKeys] eBay

[David I. Emery]

On Sat, Dec 10, 2011 at 01:41:49PM -0500, Peter Gottlieb wrote:
> 
> 
> On 12/10/2011 1:28 PM, Richard wrote:
> >
> >
> > Aren't we all forgetting that it's the HIGHEST bid that wins, no
> > matter what time it was placed?
> 
> Of course, but that ignores the effect of psychology.  Before I went to 
> sniping I lost many auctions where someone kept bidding until they beat 
> me.  This "must win" mentality is what has led auctions to get to absurd 
> prices.  So for me, I still bid the maximum I would be willing to pay, 
> but I do it via snipe.  If the price has risen to over that amount, I 
> lose.  But I find myself winning a lot more auctions now.  When I first 
> started sniping I had a rather large list of items I was trying to get.  
> I got them all via sniping for far less than I had been budgeting using 
> regular bidding.  Anotherwords, I was buying items at a rapid pace for 
> prices which had consistently been insufficient previously.

	Almost any game-theoretic examination of Ebay's auction
algorithm yields the same answer... sniping is the ONLY rational
strategy against others who might snipe, and is pretty clearly
psychologically the safest as you have a chance - long in advance if you
auto-snipe with software or services that do it for you - to calmly
and rationally decide what the thing is worth to you and stick to
that decision as you won't have a chance to reconsider and greatly
raise your bids just to "win" in the heat of the last minutes of the
auction.

	And sniping is actually fair as everyone gets to decide what the
item is really worth to them and bid that amount and the guy who it is
worth most to wins.    This means it makes no sense to bid LESS than you
think the thing is worth to you just to provide some wiggle room for
someone else to raise you... nor much MORE than the item is worth to you
as you will have no way until the auction is over of knowing whether
your gonna have to pay pretty much your max or not.   Sometimes you do.

	And very clearly if you are absolutely desperate to buy the 
thing, it STILL is likely cheapest to snipe with a huge bid as you stand
a pretty good chance of outbidding other folks who might rethink things
if they had a chance and rationalize to themselves bidding enough more
to either raise your cost a lot or beat you.   Often folks look at a low
amount and allow themselves to get lulled into assuming nobody is
interested so a low half hearted bid will probably work - but many of
those folks will eventually bid much more if they know there is serious
competition.

	Obviously for both Ebay and the seller sniping is less optimum
as it avoids many crazy bidding wars that may result in windfall prices
and profits.   But I am sure some sellers are sometimes glad to see
sniping, as I bet a significant number of crazy bidding wars end with
defaults on payment or return of the goods on some pretext and/or buyers
who at least are real pains in the tail because they are sore about the
price they paid and deeply regret the purchase..   For sellers these can
be costly compared to a happy customer who pays quickly.

	Most fundamental to this is recognizing that bidding up an item
in advance of the final definitive auction at the last second simply
makes it seem more desirable and valuable to others - most folks are
going to feel much more positive about something with a reasonable price
and several bids (because they know others value it) than something with
a really low price and no or maybe one bid(s) (must be something wrong
with it, right ?) so a higher price item may actually attract STILL
HIGHER bids... thus the best strategy is NOT to run its price up in
advance of the auction - even if you are pretty sure it will sell for
more than it is at now - thus encouraging many potential bidders to look
at it at the low price and think "hey, must be something I miss about it
that makes it no good..." but rather just pick a decent snipe bid at a
reasonable price and wait to see if you won it at maybe much less than
that bid because nobody else had any visible company bidding on it that
would help reinforce their interest and convince them to take the
chance.

	People (and even Ebay bidders) are herd animals (eg sheep) who
follow others far more often than they would like to admit...





-- 
  Dave Emery N1PRE/AE, die at dieconsulting.com  DIE Consulting, Weston, Mass 02493
"An empty zombie mind with a forlorn barely readable weatherbeaten
'For Rent' sign still vainly flapping outside on the weed encrusted pole - in 
celebration of what could have been, but wasn't and is not to be now either."