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 21:48:26 GMT
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Viewed:
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1133 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.
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 their
intitial, and any subsequent bids. Its safer not to allow this whatsoever.
> > 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.
OK. This is a psychological thing as well. Which can be harmful to the
seller's cause. If an auction has been running its course, and is on its
last day, with only one bid, other possible bidders may believe it is not a
good value, since seemingly no one wants to bid on it. Giving the buyer
this manipulative skill may be pleasant for the buyer who can weild it, but
if its allowed, and it hurts a seller, it may hurt the auction site, too.
> > 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.
OK. So we are overly emotional people, eh? We know how a system works,
we know that certain things can and do happen, and we still get MAD when
they do happen. Thats a good explanation, and does show me where the
frustrated and angry posts regarding eBay are coming from. I get it. These
people are pissed and venting. OK. I can't deny that I know that feeling
myself. I have had my fair share of angry moments regarding ebay, or my
ISP, or something else that went wrong and I could not get what I wanted. I
have learned to accept it, and do whatever I can do to avoid it. Once you
have made these errors, and gotten mad about them, there is no reason to let
them happen again - just do what you know you need to do to avoid them.
Also, if you can detach yourself from emotions, you will be much better off,
not just with eBay, or auctions, but with computing of any kind.
> Also, see (and think about) the questions here...
> http://www.lugnet.com/news/display.cgi?lugnet.market.auction:1269
The thread chart at the bottom left is very cool, but I don't think thats
you wanted me to think about.
> ...which point out the crazy anomalies that happen.
DO you want the answers here? on which auction - didn't someone already
do this? I did think about it. Looking at them all, the anomalies are
interesting. Eliminate pennies and bid increments and where are the
anomalies? Do people think its fairer to lose by a buck than a penny? Will
that disturb them less? Just because a person only beat you by a penny, it
doesn't mean he wasn't willing to spend another $100 if needed. I agree
that the anomolaies will cause anger, and its in the best interest of an
on-line auction to do what it can not to have angry customers. But it
sounds like you did an enormous amount of work perfecting your auction
system, and not every auction, especially the biggest and best one around is
going to go through those pains. If a smaller auction can see this
deficiency and do something about it, they may havea better chance of
competing with the "giant".
> 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.
Its all psychological, and I've had enough of that.
> > 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).
Well, you a have a point. It is unjust that it works in such a way, but
it does. "Life is unfair" (JFK). If someone can create a better system,
they have a chance to compete. I would certainly like to see a superior
auction to eBay with the market eBay has. I was hoping for it over a year
ago, when it appeared that eBay was quickly leaving every other on-line
auction in the dust. It is a good sign that there are finally others
starting to compete. I wish the luck.
> Actually, bid manipulation is every bit as dangerous WITH minimum bid
> increments as WITHOUT them.
Your right - I hadn't thought this through fully, or have forgotten what
I was thinking. Wish I could remember :-) See below...
> 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.
Yes, you run the risk, but as eBay is now, it is easier than it should
be. Say the bid is $90 and the proxy is $100. The seller has a shill, who
strongly suspects the current high bidder has a proxy at about $100. So he
bids, a funky number, like $92.67, and the current bid rises to $95.17. He
then bids $97.67, and instead of rising to $100.17, it only rises to $100 -
then the shill stops, effectively rasing the high bid to the max (and
bringing in $10 more for the seller). It happens enough that eBay warns
people and tells where to send mail to report it. Actually without the
increment, and only using whole dollar amounts, this could be made more
difficult for the sellers who employ it. I have seen enough complaints
about it in similar venting posts, that it would be worthwhile to curb it.
> 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? :-)
No, I don't like the increments. If you were willing to pay a dollar more
for an item, then why didn't you bid a dollar more. People have to decide
for themselves what something is worth. With a fixed time auction, I don't
think the increment is necessary. With an ongoing auction it makes sense to
have increments for the sake of expediency.
In the event the auction designer feels that increments are necessary, I
have a recomendation. I bring this up as I don't design auction software,
and there will indubitably be increments in any software made. Design it so
that the bid a second bidder enters is only matched by the first bidder's
higher proxy. Meaning A places the opening bid of $50, with $100 proxy. B
bids $60, and the current bid rises to $60, not $61, as most have it now.
This way, there is no chance to discover the other proxy without exceeding
it. Adding to that, only allow bids of incremental numbers. If the
increment is $1, only allow bids in even dollars. If the increment is ten
only allow bids in that increment, such as $70, $80, but not $75. See?
This eliminates bumping, I think, if I am not overlooking anything this
time. I think this is what I was refering to earlier (above and before),
but did not lay it out fully.
> 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.
IIRC I have never done either of those myself. I did fall off a truck a
long time ago - boy did that hurt!
--
Have fun!
John ( jdiri14897@email.msn.com ) remove NOSPAM:
John's Lego Web Trade Page:
http://www114.pair.com/ig88/lego/index.htm
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Message has 2 Replies:
 | | Re: Proxy ratcheting: How do auction systems work?
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| (...) Someone bids $100 with a proxy max of $500. Now it's climbed to $150 and the bidding is still hot, and the high bidder realizes he doesn't have $500 after all (maybe it was a typo, or maybe he was counting on some money to come in which didn't (...) (26 years ago, 22-Apr-99, to lugnet.market.auction)
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