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Why is that not a good strategy? It has consistently worked for me.
by cbr 13y ago
Why is that not a good strategy? It has consistently worked for me.
- foobarqux 13y agoBecause if you do that you should be indifferent to whether you win or not. Dutch auctions aim to solve that problem.
- tedsanders 13y agoDoesn't everyone bid until the point of indifference? What better point is there to stop at?
- foobarqux 13y agoDepends on the type of auction. In a Vickrey [1] auction you bid to the point of indifference but pay the second highest bid, that way you potentially capture some utility surplus. [1] I said "Dutch" but apparently that technically refers to something else.
- MichaelGG 13y agoBecause it reveals more information to other bidders, as eBay auto-increments. So by bidding early, you get zero advantage. Another bidder might see 2 hours left for a cheap item, and put in a minimum bid, hoping to win. If you auto-bid them up, then they might further increase their bid. If you snipe them, you bypass any response they have. The system works if all bids were kept secret until the end, but that lowers pricing, and isn't what people think when they hear "auction". Meanwhile, as-is, bidding early benefits you nothing and possibly harms you.
- CamperBob2 13y agoWhy is that not a good strategy? It has consistently worked for me. Because your desire for an item, expressed by your bid, is a signal to other buyers that can only raise the final price of that item. This strategy may work for you, but only if you're indifferent to the prices you pay.
- cbr 13y agoWhen you use the auto-bidder you're not revealing any more information than if you increment bids by hand. Are you saying I could buy things on ebay at lower prices by manually entering bids, implementing the auto-bidder algorithm by hand?
- CamperBob2 13y agoWhen you use the auto-bidder you're not revealing any more information than if you increment bids by hand. After you (or your proxy) enter a successful bid, eBay raises the price and increments the bid count. Those are market signals. It's not a question of whether the auction uses proxy bidding or real-time bid entry... it's a question of when your bid shows up for all to see. It's never in your best interest to call attention to an auction you're interested in bidding on, yet that's exactly what you do when you bid before the very last few seconds. Are you saying I could buy things on ebay at lower prices by manually entering bids, implementing the auto-bidder algorithm by hand? Yes, that's what eSnipe and other services do for you. They allow you to hide your interest in an item until it's too late for anyone to rethink how badly they want to win.
- cbr 13y agoThanks! I understand now. Convinced.