Could someone relate how these things work? I read E-bay’s FAlmostworthlessQ on the subject, and the two examples don’t really answer all of my questions. When does the price go up? When does the price on the screen change? The moment ONE person bids higher than the starting bid, or the moment the actual selling price raises? Since proxy bidding does not work, do I have to watch the item until the last second to avoid being outbid? Does the seller have any choice over who he sells his trinkets too? It seems an awfully nebulous way of going about a transaction, and you’ll forgive me if I am less than reassured by E-bay’s cheerful insistence that people usually get their item for less than what they bid for.
On that note (and slightly out of the realm of GQ) does anyone have any Dutch Auction bidding strategies they’d care to share? I am looking at one of four $125 items. Do I bid early to make sure I am one of the qualifying low bids? Does sniping come into play in a Dutch auction? What to do…what to do…?
Thanks.
The basic idea is that the seller has multiple identical items for sale. You bid both a price per item and a number of items you desire. At the end they take the highest bids which cover the multiple items, and sell to all those bidders at the lowest of the winning bids. You are allowed to specify that you won’t take partial fulfillment, in which case you would get lopped of the winning bid list if there weren’t enough items left over to fill your order after filling the higher bidders. In the case of ties, earlier bidders get the merchandise.
No proxies, so, presumably, yes, you have to keep checking the auction to see if you have to bump up your bid.
They seem to show the lowest current winning bid, ie, the price all the winners will get the merchandise for if the auction ends at the current bids. The “highest bidders” link lists the current winners and their bids, so you can know what you have to do to get back in the running.
Note that “Dutch auction” can have several meanings, depending on who’s running the auction. I have seen it applied to what is more properly a “reverse auction” where the seller starts high and keeps dropping the price until somebody buys the merchandise.
As for strategy, I am not going to hazard an opinion. I’ve never participated in an EBay Dutch auction.
[message edited by Rhythmdvl]
So… the starting price is $125. I’m willing to pay up to $140. I put that in, but the price won’t go up until… until… until when? If three other people put in the same price (there are only four items) what happens to the price? Does it go right up to 140? Does it still sit at 125 until a fourth person comes along? What if the fourth person bids 135? Do the original four’s bid jump to 135, and the fifth person is still out of the running? Or does the selling price jump over the fifth person and go up to 140? Does the seller see what is happening, or does he only see the minimum bid as well? Am I making too much out of this? If so, why aren’t Ebay’s instructions clearer? Yikes…
The price won’t go up to $140 until there are enough bids at $140 or above to absorb all of the available items. If you bid $140, and there are ten of them for sale, you could get it at $125 if that’s the lowest of the top ten bids (counting somebody that asked for 4 of them at a higher price as 4 “bids”). Open up one of their dutch auctions, and look at the “high bidders”. You’ll see what’s going on.
eBay’s concept of what constitutes a Dutch Auction would seem to be significantly at variance with the original concept.
In a Dutch Auction the price is initially set high and then the price falls (it never rises) until a purchaser places a bid. First bid is the last bid.
I’ve most commonly seen Dutch Auctions used in agricultural and market produce in e.g. fish, flowers, cheese, livestock etc. Usually there is a clock or a digital display showing the current price. Their advantages are that they can be easily automated and are very efficient at moving large numbers of small lots of similarly priced goods.
As to strategy, there is none. That why they are so efficient in their application.
Oh, and I looked at a few of these by searching for “dutch” and picking out a couple auctions that had a lot of bidders in them. For example, if the current price is $120, and there are 4 of them, the “high bidders” list might show something like:
Joe Blow - $160 1
Mary Doe - $140 2
Arnold Ziffle - $120 1
If Napoleon Bonaparte bids $130, Arnold gets bumped off the list, and the current price goes to $130. If it stays that way to the end of the auction, Joe, Mary and Nappy all get them for $130 apiece.