Subject:
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Re: Proxy ratcheting: How do auction systems work?
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Newsgroups:
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lugnet.market.auction
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Date:
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Wed, 21 Apr 1999 21:08:01 GMT
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Viewed:
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904 times
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In lugnet.market.auction, jdiri14897@email.msn.com (John DiRienzo) writes:
> For all the condemnation eBay recieves, I still believe it is one of the
> best systems made. The system described above is not good at all, IMO, if
> it allows a person to make a bid, then withdraw it later.
It doesn't allow them to withdraw their bid. It allows them to reduce their
private maximum. This hurts neither the seller nor the other bidders in any
way.
> And what is the
> advantage of a firm bid opposed to a proxy bid?
A firm bid is a special case of a proxy bid in which the minimum and maximum
components of are equal. Allowing the minimum to be set as high as the
maximum (rather than requiring the minimum to be set lower than the maximum)
allows bidders to make huge jumps in price if they choose to do so. Some
people like to do this, as it sends a psychological message to the other
bidders.
> For the buyer I see no
> advantage - he could, possibly, have won the item for a lower price with the
> proxy system, and can still be outbid on his firm bid.
[Some] people want to be able to do it. So that is the advantage for them.
> It is bad for the
> seller if firm bids are made, as it reduces the number of potential bidders.
No. It just means that the price climbs to its eventual location faster
than it would under a purely proxy bidding scenario.
> I have not seen the auction being described, but if I have a correct
> understanding of its operation, I do not find it superior to eBay.
>
> In another post, there is some argument about the minimum bid increments
> for eBay and Auczilla. With eBay, a new bidder does not have to beat a
> prior proxy bid by the minimum bid increment to be high bidder. In
> Auczilla, the new bidder must bid at least the previous proxy plus the
> minimum increment to secure the high bid. I can see some reason for
> argument here, but not much. It was said that an item with a previous proxy
> bid of $100 could be secured by a later bidder with only a bid of $100.01,
> which is true, but whats the problem?
The PROBLEM is that it makes bidders FURIOUS to lose a lot to someone else
by a measely PENNY.
It is CRUEL to allow this to happen. Auction systems should NOT allow this
to happen under any circumstances, even in a G1/G2/Sold type of auction.
Also, see (and think about) the questions here...
http://www.lugnet.com/news/display.cgi?lugnet.market.auction:1269
...which point out the crazy anomalies that happen.
> It requires a bit of luck to place a
> bid just 1 cent over the (unknown) proxy bid in place, and although it does
> happen, I can not see how it is a reward to a later bidder, or that it is
> advantageous for a sniper.
The reward for the sniper is psychological.
> If the later bidder only bid $100, he would then
> know the previous bidder's max, and be able to rebid, anyway.
And then he would have to bid $105 or somesuch. Much much much much fairer
to the person who made the proxy-max bid of $100.
> If the second
> bidder is willing to pay 1 cent more (or even $2.25 where the increment is
> $2.50) then the seller deserves to sell to the highest possible bidder.
No no no no no.
It *HAS* to be the minimum increment in order to be fair. Otherwise you
have a mathematical contradiction in the basic principles. More
importantly, if you allow a second bidder to waltz in and pay 1 cent more
than the high bidder, you WILL majorly frustrate the high bidder (unless the
high bidder has been raised on and is used to crummy bidding systems and
doesn't expect fairness).
IF the fundamental fairness principles are:
- Equal bid goes to the earlier bidder
- New bids must exceed current high bids by the minimum increment
THEN it is a contradiction of these principles -- plain and simple -- to
allow a $100.01 bid to overtake a $100.00 bid.
> Really, with a proxy bidding system, I see no reason for an increment
> whatsoever - it can only benefit bid manipulation. Without minimum bid
> increments, there is no way to discover a prior proxy and bump it to its
> max,
Mostly true, but not entirely true. If you are a mischievous bidder and you
get lucky and happen to guess someone's proxy max exactly, and you bid that
amount, you will have (a) discovered their prior proxy max and (b) bumped it
to its max.
BUT: Are you implying that WITH a minimum bid increment, there IS a way to
discover a prior proxy and bump it to its max? Any more so than there would
be without a minimum bid increment? I hope you're not implying that,
because it's not true. But if you're not implying that, then what's the
point of the question?
> there would be more risk involved for the person attempting to bump the
> bid, in that he could easily overtake the bid, which is far from his
> objective. Eliminate the miminum bid increment and you essentially
> eliminate the danger of bid manipulations, because they become too risky.
Actually, bid manipulation is every bit as dangerous WITH minimum bid
increments as WITHOUT them.
If you have a high bid of $50 and a secret proxy max of $100, and the
minimum bid increment on $50 is $2, someone else CANNOT bid $51 and make
your high bid jump to $51. Their bid would be rejected because it's below
the minimum increment, and your bid would stay at $50, and they would be
none the wiser about your secret proxy max. Now if instead of bidding $51,
they bid $52, then they would meet the minimum bid increment criteria, their
bid would be looked at, and you would retain the high bid at either $52 or
$54, depending on how the ping-ponging of proxy bids plays out. Any way you
look at it (with or without minimum bid increments), the other mischievous
bidder runs the risk of winning the high bid at $52 if your secret proxy max
were $50 instead of $100.
> Another factor that can be added is not allowing bids in cents, but only in
> whole (my preference), half, or even quarter dollars.
Losing by a penny on a $10 item is the same living hell as losing by a
dollar on a $1000 item.
Good general idea, though. To make it work, the rounding has to be on a
sliding scale. But then, you're right back to sliding-scale minimum
increments, aren't you? :-)
> I still maintain, as
> from an earlier thread, that although eBay (or any auction with proxy
> bidding) is susceptible to bid manipulation, it does not occur frequently,
I don't hit my thumb with a hammer or spill hot coffee in my lap frequently,
but those moments of pain sure stand out psychologically.
> and is not a reasonable cause for eBay animosity or for an adjustment to the
> way the auction (eBay) operates.
Whatever.
--Todd
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Message has 2 Replies:
 | | Re: Proxy ratcheting: How do auction systems work?
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| (...) if (...) their (...) any (...) Yes, but, psychologiaclly, this could be detrimental for the bidder, in that people may bid too much, thinking they can always change later. Not having such an option, people must give greater consideration to (...) (25 years ago, 21-Apr-99, to lugnet.market.auction)
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