My point has been about the nature of this “max price”.
It’s getting a little annoying having people say “well anyway, just bid your max price” and disregard the point I’m making.
Just as it’s impossible to state the precise number of grains of sand at which they become a “handful”, so there is no discrete point between “good” and “bad” price for me.
OK, I hadn’t seen your earlier post.
So, you’re effectively saying that I should bid at (Y - 1)? The absolute limit of what I would be prepared to pay?
Fair enough, if that’s the strategy that works for you. Personally I’d rank the strategies in this order:
Petition eBay to change the mechanics of auctions slightly, so bid sniping is less of a problem.
Bid something like (X + Y) / 2, and accept that on some occasions I will be outbid by 2 cents when I would happily have paid an extra 3 cents.
Bid (Y - 1). And in the worst case, pay what I consider to be an exorbitant price in all of the auctions that I’m taking part in.
You seem to have a problem with the concept of a Max Price. You are not bidding rationally if you have not determined what an item is worth to you, and are relying on others to decide that it is worth more.
Yes, bid what you are willing to pay. If no one else thinks it is worth as much as you do, then you get the item for what they thought it was worth plus one bid increment. If someone thought it was worth more than you did, you force them to pay one bid increment more than you wanted to pay.
That simple. And if you don’t get this one, another item just like it wil be along in a week or so.
I think the problem here is that nobody is disputing your point; in fact, this concept of a grey area is an established fact of human psychology. And eBay buyers who do not recognize and attempt to correct for this fact are the “dumb” ones (no offense) that most often get beat by and complain about snipers.
What you have to do is pick a number. Use any formula you want, but you have to pick a number. Then tell yourself that below that number is a good deal and above that number (even by one cent) is a bad deal. You’re playing the long game; there will be another one of this item, and you will be buying other items in the future. For me, that number is usually about 10% less than the average price in eBay’s completed listings for that item (I use a spreadsheet and everything). If someone beats me by one bid unit above that number, good for them; I know I’ll get it at my price at some point. Even for rare or time-dependent items, you need to just figure out your maximum, although it will probably be higher than it would be otherwise. Then you can set and forget either your classic max bid or sniping program and be happy no matter what happens. The only exception would be for something so unique that you have no idea of its value. In that case, you can see what the other bidders are willing to pay and evaluate your max bid in that light. But watch out, you competition could still be idiots who are vastly overestimating its worth and then you get stuck in a feedback loop.
For someone like you, I think ebay should change the mechanics to allow 1000000 digit precision irrational numbers. This way, you can apply the mathematical thought process of Dedekind Cut or Cauchy Limit to win the auction.
For example,
if someone bids $4500.02 ,
you bid $4500.021, ($4500.021 is higher amount than $4500.02)
he bids $4500.0211,
you bid $4500.02111
he bids $4500.021111
you bid $4500.0211111
… and repeat the back & forth process all the way out to 1 million decimal places
With each bid, the time is extended out by 5 minutes. Whoever gives up first, loses the auction.
In this way, you get to “win” and the final auction price gets rounded down from $4500.0211111111111… to the standard 2 decimal places of $4500.02! You win without having to ultimately pay the higher “exorbitant” price of $5300. Now, someone else might bid $4600 but that’s a different issue that’s already been discussed to death in the previous posts.
Unstated thus far is the reason people think sniping is a problem, unfair, whatever.
Most of this comes from not understanding how ebay’s proxy bidding works. They think the sniper “stole” the item by bidding just one increment over their bid. They don’t get that most likely the sniper bid quite a bit higher than that, and the proxy bidding algorithm did the rest.
Also unstated is the fact that there is no advantage, and a slight disadvantage to bidding literally at the last millisecond. In addition to the risk of missing the closing time due to network delays, etc. the last bid in will lose in the case of ties. This is significant, because due to the bidding rules, it doesn’t have to be an exact tie, only within the minimum bid increment. If other bidders (snipers or otherwise) bid the price up to within less than an increment of your snipe, it will be rejected even if it is the highest bid. There is a slight advantage to bidding in the earlier part of the last seconds rush.
The optimum bidding time is the earliest bid that does not allow time for a manually entered “impulse” bid to follow it. 10 seconds before ending time is maybe just a bit too soon, but 1 second is certainly sub optimal as well.
It’s getting a little annoying [to use your words] expecting eBay to change to your standards. You want an outcry auction. EBay isn’t that. Let me rephrase what you want: You want to know everyone else’s max bid before you make up your mind. So in order to make this an outcry auction, all of us must be at our terminals when the auction ends. Why should you have the advantage of knowing our max bid when we don’t have the luxury of knowing yours?
EBay is not an outcry auction. Think of it it as a sealed-bid auction. The advantage here is: If you’re the high bidder, you don’t have to actually pay your bid, you only pay one bid increment above the 2nd highest bidder.
Well, part of what I’m saying is that the idea of “This item is worth X to me” is a fiction.
No-one starts out with such an idea. We must both consider our desire to have the item and inspect the market.
To gauge the market in an auction situation is somewhat different to the retail situations that we are more familiar with.
And even after doing this, my ideal price remains zero (or negative infinity). All that’s changed is my idea of an “average”, “bargain” or a “high” price.
And given that for any X that I’m happy to pay, I would also be happy to pay X+1, what do I bid?
Err…yes.
Seriously though, I think it is a slight flaw in the way that eBay auctions take place. It’s a problem for sellers as much as buyers.
When I’ve sold items they’ve generally had few bids until the last seconds when there’s a brief flurry of activity and the winner is often someone who snipes.
It’s hard to know if this leads to lower or higher prices on average, but it’s sufficiently different from how public auctions are conducted for it to be an interesting question.
Forget about my suggestion of extending the auction, it was meant as an example. I am not claiming to have a solution or even necessarily claiming it is a (significant) problem.
My main point is against the position that sniping only works against irrational buyers. I disagree with this and believe that rational buyers using rational strategies can be sniped.
Yep, you’ve emphasized several times that there’s no exact price in your mind:
It’s perfectly reasonable to not have an exact cutoff right down to the penny. I totally understand that. You know what else that might shock you? Most of the folks including the hard core veteran ebayers also don’t know exactly down to the penny what their “true” do-or-die maximum is.
You say your maximum is “fuzzy” which is why you lose. But I say everybody else (including the expert snipers) are also “fuzzy” and yet they beat you and win. How is that? It’s because the other fuzzy thinkers commit to submitting a higher bid. It’s as simple as that. You don’t have to agonize over finding the exact $0.01 cutoff. You just have to place a bid that you think will beat everybody else. It’s not the sniping that wins – it’s the higher bid amount.
We really can’t use this “fuzzy” range as a real reason for winning or losing because we all have it to one degree or another. How about other areas in your life where the thresholds are fuzzy numbers?
For example, you have to be at work by 9:00am or you’re considered late. You know you need to leave before 8:15 to get there on time. Is it really 45 minutes and 00 seconds exactly? Or is it 41m30s? Or is it 44:59.0000000000001? This fuzzy threshold doesn’t keep you from leaving the house right? You simply chose a number “45” as your max and moved forward.
Now that you’re driving in your car, you’ve got more fuzzy choices. You’re speeding along at 60 mph and you see some cars up ahead stopped at a red light. At what point do you hit the brakes to stop in time? 1000 feet? 500 feet? 492.3813 feet? Do you have an exact number down to the millimeter? You rationally know that scientifically and mechanically, there exists a “true minimum” distance for braking to prevent your car from rear-ending the guy in front of you. How does one think through this even though that actual true minimum is unknown every single time you must decide to stop a moving car?
Ok, so those fuzzy number decisions are done in isolation. Maybe it’s more complicated when you have to consider multiple actors (in other words, the competition.)
Ok, let’s pretend there’s a popular event that will take place (a music concert, or Apple Store product release, etc). If you want the best tickets, or best seat, or a chance at getting a hard-to-find product, you know you’ll have to get in line before the doors open. You want to get in front of everyone else that wants to participate. How much time in advance will are you willing to wait to do this? 1 hour? 1 day? 1 week? What’s your threshold for the inconvenience of camping out in line? It’s a **fuzzy number **right? You can’t say that “event Time T-minus-18h42m17s is the exact maximum I’m willing to go wait in line.” And yet, you must make a discrete choice of when to leave for the venue because all the other fans are making their discrete choices. Now, let’s say you get there and you’re surprised to see 100 people already in line, did you really lose out because your threshold was “fuzzy”? Remember, all the other early-bird fans had fuzzy thresholds as well and yet they got in line ahead of you.
Bid the X+1 … you just stated you were happy paying that.
Can you explain clearly why someone else bidding X+2 makes any difference to your threshold? What does that X+2 tell you that you didn’t already know before that competing bid was placed? Did it somehow tell you that you would’ve been ok with bidding X+3? You could have known your feelings about X+3 before the other guy placed his X+2! Besides, what if there’s a X+4 or X+5 bidder out there that hasn’t submitted his bid yet but his finger is caressing that “submit” button ready to outbid you. And going back to the X+2 guy, you don’t even know if that’s his max proxy bid! Your new found revelation with X+3 was rendered irrelevant.
So the question is: why are you not placing a bid of X+3 instead of just X?
The word “rational” has been mangled to the point of being useless in this thread. Let’s put it this way, if you use a flawed strategy, you’ll get sniped and lose.
The point of sniping is not to win–it’s to bid without the possibility of stimulating other bidding and driving up the price just because you’re bidding. If another bidder has already entered a max price higher than the sniper’s max, the other bidder wins. Every time.
Even the language of eBay is designed to incite excitement among bidders and lead to more bidding and higher prices. You didn’t “win” anything. You simply get the privilege of paying more than any other bidder was willing to pay.
If the winning bid is $2 more than the second highest bid, that doesn’t mean that the second-place bidder would have gottent the item if he had only bid $3 higher. It means that the winner had a higher maximum than the second-place maximum. You can never know how much higher. It might look like you lost by $2 but maybe the winner’s max was $100 higher.
Ruminator, that’s a long post with no apparent point beyond trying to imply I’m teh n00b at eBay.
I don’t consider myself “special” for having a fuzzy price in mind: my point was about how value works for everyone.
Nor do I consider myself to particularly be an eBay “loser”: I’ve been sniped a few times recently, but sure, I’ve got lots of bargains off the site.
I joined this thread with two points:
Firstly, that rational people, with rational strategies can get sniped. The vast majority of preceding posts implied that the only way to get sniped is if you get into a bidding war and go above the amount you’re really willing to pay.
This is not true, and there are plenty of sensible buying strategies that nonetheless may lose to a bid in the last seconds.
I’ve given plenty of analogies to describe why this is the case, and dopers seem unwilling to tell me what’s wrong with such analogies.
Secondly I suggested that eBay could change the auction mechanism slightly to eliminate this problem.
I haven’t changed my mind on this point, but now want to move away from it, because I could see we were about to have a debate on the optimal set of rules, which doesn’t interest me so much.
The general feeling on this thread was that only irrational people can feel like they got sniped e.g. someone that doesn’t understand how bidding on eBay works, so they bid too low.
and/or
That the snipers may be irrational, because they should just bid their maximum earlier on and spare themselves the hassle or whatever.
(Both assumptions are wrong IMO. But apparently it’s sacrilege to imply eBay’s setup is imperfect)
But you are not bidding rationally. You are bidding emotionally, and wishing that eBay would change its process to cater to the emotional bider.
If you were bidding rationally you would decide how much an item was worth to you, and bid that amount as late in the auction cycle as you were comfortable with. The bids of others would not influence the preceived worth of the item to you.
I think people are taking offense at otherwise neutral labels. “Rational” and “irrational” don’t apply to any one person in particular. They’re very specific terms with specific uses in economics and game theory. I’ll often bid “irrationally” because it’s recognized in lots of games that individual humans aren’t always rational (luckily, for the most part, markets are).
The rational strategy is to submit the highest amount that wins. It is impossible to get sniped if your bid is the highest amount.
That’s not correct. The vast majority of preceding posts explain that the losing bids were mathematically too low. Bidders were keeping their true max (fuzzy or otherwise) in their head instead of submitting it to ebay’s proxy system.
What’s “sensible” and “rational” about not submitting the highest bid via the proxy system? It doesn’t matter if the sniper places his bid 0.01 seconds before the end of the auction. Your higher bid by proxy will beat the sniper. The ebay proxy amount renders nanosecond timings of bids irrelevant.
You’re not getting beat by snipers. You’re getting beat by higher bids.
You’ve emphasized that you don’t know what your max bid is until someone else bids. Why do you perceive the other bidder’s behavior as “new” information to you? I ask because other bidders don’t provide me any information about my max. My max is my max even though it is somewhat fuzzy just like yours. Why do other bidders have an influence on your max bid? It’s not like they’re sending you Twitter updates explaining their reasoning for buying the item to help you reevaluate its value. More importantly, that bid you see doesn’t fully reveal their max proxy bid.
You said earlier that someone else’s bid of a tiny increment would trigger a revelation of a “new” maximum in your mind…
Just to be clear, do you realize that if the winning bid beats you by $5 that may not be the true difference between you and the winner? The winner (sniper) may have submitted a max proxy of $6000. To you, it only “looks” like $5 because ebay adjusts the final bid amount to your max and not his. You may have lost by $1500 and will never know it.
But they already implemented a mechanism to address this “problem”. It’s the proxy bid system. It will beat any and all snipers.
Extending the auction time doesn’t solve the issue of the max proxy bid beating everyone’s bids in overtime. Are you also suggesting removing the proxy bid mechanism?
But that’s exactly what I do when I snipe. I simply plug into a sniping tool what is truly my maximum price, and I never look back.
Sniping isn’t a problem. Ebay doesn’t promise it’s going to be “fair” according to your ideal terms and rules. Ebay is not a constitutional right. It’s a private business that has clear, specific rules that you agree to by selling or buying there, and you need to work within those rules or go somewhere else.
I like sniping. I hope you don’t start sniping. I snipe because of people like you.
Let’s say I’m looking for a leatherbound copy of a particular book. If it’s in print, I check the publisher’s website and see what list price is. If it’s not in print, I’ll search online dealers and see what copies in the condition I want are going for. If list price on a new one is $100 and “almost new” used copies are going for $50, then when I sign into eBay, my max price is $50 (including shipping). I won’t bid $50.01, because I can buy one for $50 elsewhere. Actually, I’d probably bid $40.
Most of the stuff I’ve bid on in eBay has been stuff I can live without. If it’s rare–meaning they only show up a few times a year–I’ll bid what I think it’s worth. Ditto if I have a time limit (e.g., birthday present). Otherwise, I always bid low. I almost always lose. But when I do win, I get deals.
Quite a fascinating thread. I must say I’m with Ruminator here: There is only one way to win an auction, and that is to submit the highest bid. If someone else bids higher than you, you lose, no matter if you submitted your bids manually or through a sniper.
And it’s quite evident that in an auction the way ebay works, it is in your interest to set your bid equal to what you think the item is worth to you. If you enter a lower bid, you risk missing out on a bargain: Suppose the item is worth $20 to me, but for whatever reason, I enter a bid of $15 only. Now I run the risk of losing the item to a rival who bids, say, $18, whereas if I had entered a bid of $20, I would have won the auction and paid a price of $18 plus increment, making a profit of $2 minus increment. So it’s evidently not rational for me to bid below my subjective valuation of the item.
It is equally evident to bid more than my subjective value of the item: I run the risk of paying more than what the item is worth to me, meaning I make a bad deal. So I shouldn’t bid more than what the item is worth to me.
The bottom line of all this is: It is in the bidder’s own interest to bid an amount that equals his or her subjective valuation of the item. And I second Wombat: I think the idea that many, or even most, bidders do have a subjective valuation of the item in mind when entering an auction is not at all unrealistic.
So, to win an auction you have to bid more than anyone else; you will pay a price that equals the bid of the second-highest bidder, plus increment. And it doesn’t matter whether the bid was submitted five days or, through a sniper, two milliseconds before the end of the auction - what ebay does to determine the winner is simply to match, when the auction has ended, all bids against each other following the simple algorith: Item goes to highest bidder for second-highest bid plus increment. That’s it. How can sniping have any impact here?
I also second what others have said about the argument that if you enter a maximum bid of $1000, you should increase that to $1005 to win the auction when you’re outbid by a $1001 bid because “these additional $5 won’t make much of a difference”. That argument doesn’t disprove the fact that it’s rational to enter your correct valuation of the item as your maximum bid; the argument simply relies on the fact that your initial maximum bid of $1000 was not your subjective value, because your subjective value is now $1005. What you did was not a particularly clever way of bidding - you simply adjusted and changed your subjective valuation of the item based on other bidder’s behaviour. That’s not at all rational.
