See subject. As far as I understand it, sniping software will pop up a higher bid up at the last possible moment.
I would prefer to put down a bid of x, and if I win pay the $2.50 or whatever. If there is a lot of bidding, and it gets too rich for my blood, If I lose I lose, but at least I’ve kept to my preset limits w/o being caught up in whatever bidding thing is going on.
The sniping lets the bidders lay low precisely so that no bidding war occurs, where feverish people keep upping the ante, right?
Right. The idea is that if there are early bids on an item, then that increases the perceived interest and therefore attracts more bids. If everyone were a perfectly rational actor, then it would make no difference. But we are not perfectly rational. Often people will keep bidding after their initial bid is defeated, so clearly that wasn’t the maximum they were willing to pay. Sniping removes that opportunity.
What JSexton said. I get far better results when I sell things when I start at $0.01 than if I set the starting limit higher, precisely because such a low starting point attracts a handful of “oh, why the hell not?” bidders, which create higher page views and “# of bids”, which attract more attention (“huh - why does that identical item have 23 bids on it? Must be something I’m not seeing that everyone else is - must be better.”)
It’s possibly worth noting that in some cases (no idea how frequent, but it’s happened to me), bidders who get carried away in a feverish bidding war often commit more than they can afford, then don’t (or can’t) complete the transaction.
I’d like to say that by sniping, you’re doing the seller a favour in potentially curtailing that kind of outcome, but I think that would probably be too rose-tinted a view.
There was a pretty lengthy thread on this before in which I argued that “sniping” is not only an issue for irrational bidders. i.e. A rational bidder can be sniped. I can’t seem to find it.
I’m quite happy to rehash my argument again, but don’t want to hijack if it’s not relevant here
Sniping also offers some protection against shilling. A dishonest seller can use a second account to place a high bid, thus discovering your limit. This bid can then be withdrawn, and a bid just below your limit placed. By sniping you deny dishonest bidders the time needed to do this. This is also a reason to refuse “second chance” offers: A dishonest seller can place a very high bid on their item, which will win the auction, then offer the item to the highest honest bidder at that bidder’s limit price. When I have been offered second chances, I instead offer the seller one increment above the the next highest bid. Such offers have never been accepted.
Basically, sniping is worthwhile because the other bidders you’re competing against might be sniping. If everyone were rational (and it were common knowledge that everyone were rational), you’d never see sniping, but if there’s the possibility of irrationality existing, then it becomes rational to snipe.
Depends what you consider rational. If you say that every person would, upon seeing a given auction, decide A) whether they want to place a bid and B) what that maximum bid is and C) immediately place said bid? And everyone knows that everyone else acts that way? In that case, sniping is pointless.
But that’s not the way the world works. Price is decided by not only demand, but by perception of demand. Knowing that others desire an object creates desire in us. Human nature is irrational.
You probably just need to read the first few pages. After that it devolves into everyone trying to convince one poster that using a manual creeping strategy gains you nothing over letting Ebay handle it for you.
The one exception that was pointed out was when there are multiple items in which case creeping from one to another allows you to get one a a good price without accidentally buying two.
Sniping works best if you use software, not manually though - many people watch the last few minutes of an auction. I use Baygenie Free - (BayGenie eBay Auction Sniper Free - Free download and software reviews - CNET Download)
Its only 1 auction at a time and I have to leave my computer on, but it works fine for me and is free. Just set it to bid 4 seconds before the end of the auction and find out if you won later.
If you preset a high number, you are susceptible to shill bidding. Also, you are vulnerable to higher bids.
If you respond to shill bids etc., you may overbid.
If you bid at the last moment, it removes some of these options.
[spoiler]
Firstly, ask yourself whether there is ever an item sold at a price where you would be 100% happy to buy at that price – no reluctance whatsoever – and 100% happy to walk away if the price were increased by even a penny.
Your answer is probably “yes”, right?
Quite often in daily life we, say, buy a jar of coffee and set an absolute maximum price we are willing to pay. It is important to appreciate though, that this maximum is not the utility of the item; it’s actually based on what we know we can buy coffee for elsewhere.
If I’ve seen my favourite brand of coffee for $2.75 I may decide I will pay no more than $3 for it anywhere (with it being worth the extra 25c to buy it here, now, rather than travel to the cheap shop). Of course it makes sense to set a hard maximum in such situations.
This isn’t the situation with most auctions however, where items may be unique or hard to find. Here you have to pick a price “out of the air”. And it’s hard to be precise; there is a continuum of decreasing happiness to buy and increasing reluctance. There is not usually a magic threshold.
So what about setting your maximum bid to the very top of the continuum; the point of minimum “happiness to buy”? Well, if you were to take part in one auction in your entire life, that strategy might make sense. But for most of us, as a lifetime strategy it is not optimal.
If you bid high all the time, you risk paying high all the time. You risk the scenario of paying a high price, then the next day discovering the item can be bought elsewhere for far cheaper.
Better is to bid some price that you think is still a relatively good deal and risk being sniped, than bid high all the time.
That’s what people unconsciously do, and given all that, it makes sense to attempt snipes, and rational bidders can be sniped. :)[/spoiler]
