I have finished my Christmas shopping this year and have done it all online; most of it has yet to arrive, so declaring victory would be premature. Several items were purchased through auctions on eBay, since I am currently among the salary-challenged. A couple others were bought in eBay on my father's behalf (as he lacks an eBay account). Of course, the auctions on eBay show the penultimate bid value (plus epsilon) and highest bidder identity, while the rest is hidden. However this system has been evolving into a silent auction.
Silent auctions entail the bidders entering their maximum bids, which remain hidden until the auction ends, and whoever bids the ultimate value pays whatever the penultimate bid was (plus epsilon). On eBay, the equivalent to this is where everyone waits until the last few seconds to place their bid, and thus, anyone who decides to bid more simply because someone else has will not have the opportunity. Obviously, silent auctions benefits buyers more than sellers, who want to drum up the price by increasing the total number of bids, and therefore apparent demand (sellers try to do this using reserve prices).
The practice of entering a bid at in last minute is called “auction sniping,” and while some people (likely adrenalin junkies) snipe manually, others use web services or run programs to automate it. Some of the services available are: www.auctionsniper.com, www.eSnipe.com, www.auctionstealer.com, www.phantombidder.com, and www.vrane.com. Of these, only www.vrane.com is free (provided you bid on only one auction at a time). Others either charge a monthly fee or a percentage (typically 1%) of the auction sale price, assuming you win. I downloaded a program for MS Windows called Auction Sentry, which allows for a free trial period of 10 days, and if I want to use it thereafter, I must buy it for $14.95. I tried it on an auction for a couple 2720 Dictaphone machines for my dad, and it worked great. I might just buy it.
EBay has basically ignored the whole sniping matter so far. But in the future I suspect they may provide more options for auctions to address the frustrations of sellers who want to induce even more demand and bidders who lose at the last second but, in light of this demand, reconsider their maximum bid. In particular, an auction could go into “overtime” if a bid was placed near the end, such that the new end to the auction will be some delta of time beyond the old auction end time. This may continue for some number of periods or the delta could exponentially decay (such as delaying 1 hour, then 30 minutes, 15, 7.5, 3.25 …). The auction would thus have a nominal end time and a maximum end time.
Posted by seander at December 14, 2003 04:52 PM