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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Thu, 22 Apr 1999 01:20:01 GMT
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Viewed:
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875 times
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In lugnet.market.auction, jdiri14897@email.msn.com (John DiRienzo) writes:
> > 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.
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 come in, or maybe he was laid off from his job). He
wants to lower his proxy max from $500 to $200, but he can't! So he sits
there in horror as the bidding climbs to $200, then to $250, then to $300,
and finally closes at $425. So great, now he's got it for $425 and he can't
afford it. So he defaults on the bid, hurting himself, the seller, and the
other bidders (all of whose time has been wasted).
Or, in desperation, to save his own face, instead of defaulting on the bid
and just prior to the auction closing, he gets creative. He fills out a new
bidder account (fake name, fake identity, fake yahoo/hotmail e-mail address)
and outbids himself.
Real safe, huh? :-/
> 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.
John, I don't mean to be harsh, but you do not appear to be thinking things
though carefully before making these statements.
Postulate for the moment the existence of an auction system which allows
only proxy bidding and does not allow firm bids (i.e., it does not allow
large jumps in price).
If you try to design a system which does not allow large jumps in price,
you'll quickly find that any such system -does- in fact allow large jumps in
price, no matter how much you try to prevent it. To manipulate the system
into allowing this, a bidder has only to post a proxy bid with a large
spread, then ask a friend to post a follow-up bid to cause the proxy bid to
raise to its maximum.
It is far better to design the system to allow such behavior via legitimate
means than to allow it only via trickery, especially when it is a commonly
requested and useful feature.
> [...]
> 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.
I believe that it is extremely important NOT to detach myself from the
emotions.
> > 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?
No, they're rhetorical & socratic.
> [...] Do people think its fairer to lose by a buck than a penny?
Absofreakinglutely, yes. People do.
> Will that disturb them less?
Yes, far 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.
Nor does it mean that I wasn't willing to spend another $200, push come to
shove.
> 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".
I don't like to think in terms of competing with a giant. If you have a
microbrewery, you don't think about competing with Buttweiser or Old Swill.
You're brewing your own stuff for a completely different group of people,
and you care about those people because they have similar values, not
because they're paying you money.
> > 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.
Maybe it's 80% psychological and 20% mathematical.
> > 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 do remember
> [...]
> 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.
That's frightening from a user standpoint. :-(
> [...]
> 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.
Because they didn't know they were willing to pay a dollar more. Or because
they have bids on multiple items and only a finite cash supply.
> People have to decide for themselves what something is worth.
Unless you are Mr. Spock, it is not possible to know the exact amount ahead
of time. And if you get sniped and don't mind it, then you're rationalizing
the pain away.
> 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.
Increments are certainly -more- useful in G1/G2/Sold auctions than they are
in fixed-ending-time auctions, but there still has to be a threshold in any
type of auction system which prevents people from snatching a bid away from
someone else for a pitifully small amount. That is, if you don't want to
receive flame mail from bidders all day long.
> 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.
Excellent suggestion. My system is currently broken in that it would jump
to $61. And although you still wouldn't know whether $61 was the max, you
-would- know that $60 wasn't the max. Alternatively, if you now bid $100,
you'll see it go back to the other bidder for the other bidder's max of $100
(not $101) and you would see that $100 was the max. This is an anomaly, so
it probably should only have jumped to $60. I'll have to think about this
more, but it sounds like a great recommendation!
> 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.
This part sounds good too. If the increment is $10 and you don't allow bids
of $75, it's impossible for someone else to bid $75 and see their bid bounce
back to the other person at $75.
It's important not to be able to see the other person's maximum even by
outbidding them because they might have applied that maximum on several
similar lots, and bidders could use this knowledge in a mischievous way.
--Todd
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Message has 2 Replies:
 | | Re: Proxy ratcheting: How do auction systems work?
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| (...) can't (...) new (...) address) (...) I would contest that a more reasonable way to get out of the bid is to let the seller know well before the auction ends that the bidder is unable to pay for what he has bid. Then that bid can be canceled. (...) (25 years ago, 22-Apr-99, to lugnet.market.auction)
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Message is in Reply To:
| | 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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