Auction Sniping

[sfbp]

One problem I have found with ebay is people sit and wait until the exact end of the listing to post a bid. I got outbid on like 10 Pearl Jam copies of Ten like this.

Unfortunately sniping has become a way of life. There are even websites that do it for you mechanically. The problem I see is when you get multiple people bidding like this, the price gets totally out of control. The snipers argue that it is better to save money by keeping the price low. My argument is that it is better to have honest and open auctions where it's known how interested folks are. People end up bidding in the heat of the moment that they really didn't intend to and cannot afford. Good for Ebay - maybe? But I am guessing the two effects cancel out, and all you get is a lot of stressed out angry bidders.

[Abby Normal]

Wow--this topic is near and dear to my heart. We probably ought to take it to the "Everything else" forum, though. It's more of a political/philosophical debate really. The solution is to always bid the maximum you are willing to pay at the very outset. If that happens to be higher than the sniper's attempts, then you win. If not, you lose. If the sniper entered a higher maximum bid than you and he won, he won fair and square--it is completely and utterly irrelevant that he did it at the last second. The only folks who should be annoyed by snipers are the sellers, not the buyers. Bidding wars only benefit sellers. Having more bids earlier than the last few moments puts up a sign for "auction chasing"--i.e. "hey, look at all those bids, I wonder what the fuss is all about? I know! I'll join in and run up the bid and the buyer will have to shell out more than he'd have to if I'd just gone ahead and went for what I came looking for." It isn't dishonest to "snipe"--it's merely a tool for keeping the weird psychology from running up the price too much. Anybody, sniper or not, who enters a single bid for the maximum he's willing to pay, is guaranteed to have to pay no more than exactly that amount (+shipping+insurance).

I confess. I use this method sometimes. I am frequently outbid at the last second even so. How do I react? I say to myself, "well, he bid higher than I was willing to pay for the item--it's his." Don't let yourself be drawn into bidding wars whether or not they are in the last few moments. Bid once for the highest amount you're willing to pay for the item--whether at the last second or 6 days prior. When someone snipes me or out-snipes me, I'm generally relieved. That person saved me from being drawn into a bidding war and spending more than I intended.

Am I going to get angry with a sniper who bids with a 2 second lead time if I use a 10 second lead time? No, because the only thing that matters is the fact that I am already committed to spend a certain amount and no more. I will win or I will lose. I placed a value on the item to me and if I win it for that amount or less I am happy. If I lose it because someone spent more, I am relieved.

Sometimes I will discover that a certain item will always bid higher than I'm willing to spend. I have made a mental list of these items. I have resolved to go to more garage/yard/estate sales and find these items so I can make a few bucks on e-bay.

Unfortunately sniping has become a way of life. There are even websites that do it for you mechanically. The problem I see is when you get multiple people bidding like this, the price gets totally out of control. The snipers argue that it is better to save money by keeping the price low. My argument is that it is better to have honest and open auctions where it's known how interested folks are. People end up bidding in the heat of the moment that they really didn't intend to and cannot afford. Good for Ebay - maybe? But I am guessing the two effects cancel out, and all you get is a lot of stressed out angry bidders.

[sfbp]

Interesting. My own instinct is quite different. I don't mind revising how much I am prepared to pay for something - frequently it will change as I see others bidding or get more information, or (downwards) decide I don't need it that much after all. It just seems much more civilised to have time to think about how much you really want something before making that final bid that seals it. Sure there's excitement in that, why not?

Often I really don't know how much something is worth when I start bidding on it. So sniping really doesn't give me a chance to evaluate the auction and change my expectations.

If we have much more of this maybe we better make a new topic. I can split them if necessary.

[Abby Normal]

I don't think there's anything wrong with changing your mind, but by the time snipers come into play you should already have your mind made up how much it is worth to you. What I do frequently is make use of the "Completed Listings" option to see what the item has been going for (presuming it's a frequently listed item, that is). Making a determination for what my spending limit on an item is the same for whether I bid outright or bid at the last minute.

Bidding wars do not reveal "true value"--they artificially inflate it. I have participated in bidding wars and I feel a rush and it's rather exhilarating...and extremely risky. A month or two ago I participated in one that I was very very relieved that I lost in the end anyway. I could not really afford to spend that amount. Luckily--the item got bid up some 200$ higher than I bid.

It's possible that this comes down to economic differences. If I were making better money right now I might enjoy the occasional bidding war. As I said--the high felt good, doubly so because I didn't have to spend the money. It's a dangerous game (for me).

Edited June 27, 2009 by narp

[sfbp]

That's all fine. I don't consider a gentle auction with the price rising over a period of some days and the last bid 1/2 hour before the end, to be a bidding war. The real problem is the *idea* of sniping fails (or at best gets botched because of technology) when more than one person does it.

We each think that sniping/not-sniping is the best way to avoid silly prices. To each his own.

[Abby Normal]

I understand how people get the idea that "when more than one person does it...it fails", but it isn't true. I draw your attention to this Wikipedia entry on

Auction Types:

http://en.wikipedia.org/wiki/Auction#Prima...ypes_of_auction

Since internally ebay uses a variation on the "sealed-bid second-price auction", all sniping does is turn it into a hybrid/variation of the "sealed-bid first-price auction"--whether 1 person does it or 20. The key is the fact that it is still the person who entered the highest maximum bid who wins--whenever they entered a bid.

It took me a little to wrap my head around this concept, too. The problem is we're all tempted to believe that snipers can just enter an arbitrarily high maximum bid and win every auction if they beat out all other bidders and snipers. The catch is that if they win they are still committed to pay 10% over the second highest maximum bid that was not theirs--even if that bid is considerably higher than they really wanted to pay. In reality, rational bidders--sniping and non-sniping--will simply enter the maximum amount they are willing to pay, irrespective of when they submit (or revise it).

That's all fine. I don't consider a gentle auction with the price rising over a period of some days and the last bid 1/2 hour before the end, to be a bidding war. The real problem is the *idea* of sniping fails (or at best gets botched because of technology) when more than one person does it.

We each think that sniping/not-sniping is the best way to avoid silly prices. To each his own.

Edited June 27, 2009 by narp

[Abby Normal]

I should add the concepts driving my opinion here also lead me to oppose the media broadcasting "exit polls" while people are still voting in other areas of the country. I also am driven to support IRV (instant runoff voting--called alternative vote or preferential vote in Canada and UK). It's all about fairness.

This seems counter-intuitive, but only because someone coined the term "snipe" and it has caught on. "Snipe" lends itself to the negative connotations and so people naturally color their analysis of the issue through this bias. I don't have another term to put in its place, so it will have to do for now.

Edited June 27, 2009 by narp

[Sony_Fan]

It's not so much sniping, it's sellers with mulitiple accounts pushing the bids up on their own products. Yes, it's illegal, but that doesn't mean they're not doing it. Recently I bidded on a PS3 game, used, that should be worth no more than $16 with shipping, and the bidding went up to over $20. I ended up buying the game new from another seller for $18 with shipping included.

[Abby Normal]

Yes, I can understand the tendency to suspect this. I suppose it might even happen from time to time, but I think it is more rare than you believe. There are people who cannot put an accurate value on an item to save their own life. I would also tread extremely carefully and not bring your suspicions to a level where you actually make the accusation. Especially for a low priced item such as that, I'd be less inclined to suspect hijinks because sellers have listing fees and if they accidentally have to buy their own item they just have to list it again--it costs them money.

It's not so much sniping, it's sellers with mulitiple accounts pushing the bids up on their own products. Yes, it's illegal, but that doesn't mean they're not doing it. Recently I bidded on a PS3 game, used, that should be worth no more than $16 with shipping, and the bidding went up to over $20. I ended up buying the game new from another seller for $18 with shipping included.