Ebay's take on sniping, and a psychological/logistical question?

[trevaniong]

Good Morning!

I've bought and sold on ebay for many years, but recently got more serious about selling. I've been working to understand the dynamics of sniping, and have read a lot of the archived conversations about it here on this forum, which has been helpful, but I find myself with a few remaining questions: 

There are a lot of opinions about this from users, but I'm curious whether Ebay has ever made any public statements, or stated their reasoning for their policy of chronological ends rather than time-from-last-bid endings? If so, anyone have a link or info on what they said? Thanks! 

The other question I have is more general, maybe- even in high school psych studies before I studied it in undergrad, we learned in detail about how competition impacts decision making. Because of this, I assumed that it went without saying that a time-from-last-bid auction ending system would lead to higher sale prices. Of course, if you're watching someone else bid 5$ more, you're more likely to add 10$ to your maximum. But somehow a majority of the conversations about this subject seem to operate from the assumption that a sniper or proxy bidder's maximum bid *without real-time competition* was the same as their maximum bid would be *under that pressure.*

I understand that most people, especially most men, operate under the delusion that we are purely rational beings who are above emotions, but this assumption seems to take that to an extreme. Do people really believe that someone looking at an item and deciding what their max bid will be without pressure will come to the same number that they would if they were in a real-time bidding war where other bidders are upping the ante on them? I have a hard time believing that anyone could be so dedicated to the myth of rationality, but perhaps I'm wrong? 

Once we can accept that a given buyer's "max bid" is not a single number but is in fact the result of a conflux of emotional factors and is therefore guaranteed to be higher under competitive pressure than it is in the absence of that pressure, then we can approach my second question: 

Wouldn't Ebay make more money under a time-from-last-bid auction closing system? 

Is there market research that shows that users don't like this system, or that it has consequences that I am not aware of? In the other conversation threads, people mention that some early ebay competitors used this system and then they failed, but that's pure correlation, and just as likely to be the result of any number of other factors, such as that Ebay was cornering the market just like Amazon and Microsoft. Is there evidence of cause? To be clear, I'm asking for research, not just anecdotes. The fact that Ebay has it's current system implies that there IS such evidence, I'm mostly just curious if anyone knows what it is?

Thanks for our thoughts and info~

(oh, and before the trolls attack, yes, I understand how proxy bidding works, and the relationship between proxy bidding and sniping. Neither replicates the real-time excitement of a bidding war where you're watching someone outbid you, and you know that if you wait 60 sec (or whatever) you'll lose the item. Whatever it's other pros or cons may be, such a system would guarantee higher sale prices.) 

[rfmtm]

I don't think ebay ever made any official statement about this.  The proxy system ebay operates under, while customized for ebay, has been in place from day one, and apparently proven effective versus other forms of bidding.

If I remember ebay did at one time offer live bid auctions as well.  They also fooled around with extending bid time based on certain criteria, as well as experimenting when a buy now option goes away.  At one time had their own version of a of Dutch auction.   Even an automatic system for moving you to a new auction should you lose your current auction.

IT all came back to the current proxy system.  It is simple, allows buyers to place bids on many different items as the same time without having to watch and bid in real time.   So for ebay and most buyers the proxy system appears to work best.

[downunder-61]

Proxy bidding on eBay and using a sniping program if you want is accepted as normal practice by eBay and probably the most commonly used on auction's by bidder's who are serious.

I would never waste my time nibbling at an auction - I want something I bid my maximum at the latest possible time - add a bit of coinage (0.63c) to the $$ amount hopefully break any tied situation and I am golden.

The end might be exciting, but I would no doubt be one of those that get's so caught up in it I end up paying more than I wanted to - no self control LOL

[nobody*s_perfect]

You're probably overestimating the rationality of eBay's decision-making process.  They rarely share any insight into how they arrive at changes in policies and procedures.  Clearly they have considered and rejected the concept of extending auction times when there is late bidding.

"Do people really believe that someone looking at an item and deciding what their max bid will be without pressure will come to the same number that they would if they were in a real-time bidding war where other bidders are upping the ante on them?"

The high rate of nonpayment after auctions suggests that buyers experience regret about getting over-invested in an auction and going past their original "true maximum" (if indeed they had ever considered that notion).  Somebody at eBay should investigate whether there's a correlation between last-minute bidding wars and nonpayment. Surely the nonpayment problem could only get worse if auction ending time was extended due to late bidding.

[downunder-61]

Clearly they have considered and rejected the concept of extending auction times when there is late bidding.

True, and where is the line drawn ? When to stop the auction?...........after the OP has bid ? 

[eburtonlab]

I understand that most people, especially most men, operate under the delusion that we are purely rational beings who are above emotions

That is a very odd thing for you to believe. I don't think most people act that way or believe that is true of themselves or others.

Do people really believe that someone looking at an item and deciding what their max bid will be without pressure will come to the same number that they would if they were in a real-time bidding war where other bidders are upping the ante on them?

Sniping is a useful strategy, in part, because it requires (some would say forces) the sniper to decide on a maximum bid well in advance, absent the pressure and excitement of a real-time bidding war that might lead an emotional user to bid more than an item is otherwise worth in the heat of the moment.

While a sniper might wind up regretting a high bid at some point later, I think that is generally less likely to occur than if the same user instead engages in a protracted bidding war with another similar user, provided the sniper is calculating a true maximum value bid rather than tossing out a nuclear bid that the sniper does not expect to be matched. It is certainly possible to be an emotional sniper, or even a coldly rational nibble bidder, though that may be a harder strategy for the average person to pursue effectively.

There are many types of possible auctions; eBay has patented one possible type. You can read the patents if you would like. There are also scholarly papers written about various types of auctions, and how they work and sometimes do not work.

The goal of an auction is not necessarily to get the highest possible price for an item -- though the seller and eBay might want that outcome, the buyer does not. The goal of an auction is to allow the buyer that is willing to pay the most to actually purchase the item. In eBay's case, that means the highest bidder winds up paying about one bidding increment above the second highest bidder's maximum bid amount. Various strategies such as sniping can be employed to place such bids while minimizing the chances of a costly bidding war for the bidder.

[house*of*paws]

Hi @trevaniong 

eBay has always had the auction format you see now ... with a few modifications that have come and gone.  There is a set number of days (hours) to the auction ... and bidding can occur at any time while the auction is active.

Experienced buyers have gradually turned away from auctions ... preferring the fast & easy BIN listings.  When they do bid on auctions ... they tend to snipe, knowing that they are likely to win at the best price that way.

Neither sellers nor experienced buyers like the idea of not knowing when an auction will actually end.  Sellers want to plan their shipping schedules ... and buyers don't want to sit at their computers endlessly.  Sellers also know that fewer paying buyers will bother bidding if the auction's end time is indefinite.

I doubt eBay has done any research since first deciding on the auction format it will use.  For the most part, those of us who still bid on auctions have learned how to maximize our chances of winning.  It's mostly newbies who object to sniping and would prefer a 'floating end time' ... but newbies are the very buyers who are least likely to pay when they win.

Your suggestion for an auction format has been brought to these Boards every few months for many, many years.  It usually is overwhelmingly objected to by whoever replies.  Most of us like the current auction format.

[jayjaspersgarage]

Few categories warrant sniping but a few might depending on the collector.  Scarcity drives greed to the extreme for many people with endless resources and time on their hands.  

You pose an excellent question.

[trevaniong]

"The high rate of nonpayment after auctions suggests that buyers experience regret about getting over-invested in an auction and going past their original "true maximum"  "


that's insightful, I hadn't thought about that. 

[misfitfun]

EBay does not have a policy or statement re snipping but since they do not block,ban or even discourage it that its ok is implicant policy

Proxy bidding is just slow snipping if used correctly(inputting your max before timeout and letting system bid)

[fab_finds4u]

eBay does have an official statement about sniping.  You can find it at Help & Contact. Go there and  type Bid Sniping in the search bar.

[mr_lincoln]

@trevaniong   One dynamic that comes in to play is what I call the "ego bid" whereby a bidder will bid beyond their maximum intended bid just for the sake of winning an auction.  I think a lot of this happens at live auctions (and friends actually heard one bidder state they will win just so nobody else gets an item).

For online auctions this can happen too but auctions with a soft close (that adds more time each time a bid is placed in the last 30 seconds) can negate some of this since bidders can not see each other and as more time is added to an item the bidders have more time to think about whether or not they really want the item.

Some bidders also engage in what I call "spite bidding" whereby they realize they will not get the item for the price they want so they bid a few more times just to drive the price up on the other bidder(s).

When I bid on items for inventory I research ahead of time and determine the max bid I can make in order to make a profit reselling.  Sometimes I just load all my Max bids in on items and wait until the auction is over to see if I won anything.  Other times I will wait for the actual auction and bid live from my price list.

What really irks me though is watching items bid OVER Retail ... these are obviously Collectors willing to pay anything to add the item(s) to their collection or "ego bidders" having a hard time losing a bidding war LOL!

[m60driver]

You don't seem to sell anything worth placing into an auction.  You would be much better off listing as fixed price.  I have had much better success listing at a slightly higher end of the trading range of a widget and then making offers to watchers.  I only use auctions where there is no good way to determine value.   My last auctions were for larger lots of relatively inexpensive items and most only got a single bid.

[chapeau-noir]

Auctions are losing ground as it is for the reason that for most items (i.e., not rare or in demand) they were nothing more than a once-upon-a-time fad at a time when P2P ecommerce was very new. I don't see 'soft endings' prolonging their life - for most items, people prefer the old tried and true model of paying a stated price for the item and receiving it (what some people amusingly call 'instant gratification'). 

But... Psychology of auctions - brief search