Subject:
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Re: Ebay sniper? you make the call
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Newsgroups:
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lugnet.market.theory
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Date:
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Mon, 25 Nov 2002 17:43:21 GMT
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Viewed:
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1688 times
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Kerry Raymond wrote:
>
> The problem with ebay is that it is trying to simulate a live auction (as
> opposed to a sealed bid auction) on a worldwide basis...
Kerry,
That's a really well written analysis.
Some problems with open ended bidding:
- a day may not be enough
- too long an extension results in auctions which do drag out (Serious
Collector had this problem as I have mentioned before)
I guess firm bids (as opposed to proxy bids) would help. If I bid a firm
$50 instead of a $50 proxy on a $1 bid, then the auction doesn't get
delayed for weeks while people nickle and dime against the proxy bid.
Another thing which helps speed bidding is to have meaningful minimum
bid increments. eBay's dollar increment is fine in the $10-30 range, but
becomes absurd in the $200 range.
A proxy bid system can also probably contribute to higher returns in
several ways:
- it allows people who don't have a lot of time to participate
- it allows one to place high bids in situations where the value is not
well understood
Of course in a large enough and free enough market, sniping should
actually become a non problem. Why? Because in a large market, people
will ultimately submit a single bid which is their "best" price. Items
would be sold for the "best" price at the time. If your "best" price is
too low, you will either never get the desired item (which may be fine,
I'm happy with never owning a BMW, though if I got to buy a new car by
bidding, I'd certainly consider submitting a bid on a BMW for what I am
willing to pay for a quality car), you will luck out and get a bargain,
or you will increase your "best" price to fit the market. If your best
price is too high, well, you will quickly get all the items you want,
and the price will fall. If you miss a few auctions but see the results,
you may reduce your "best" price.
Of course the LEGO market may not be quite large enough (though
actually, it probably is).
It's also interesting that a free market doesn't generate a single price
for each item. The reality is some people are willing to pay more for a
variety of reasons. Some sellers are also willing to get less for a
variety of reasons. If one is upset that the guy next to you paid less
for his airline ticket, don't try and make him pay more, try and get the
same deal he did (if you are willing to meet the conditions of the deal,
if not, don't complain). The airline has presumably set the minimum
price for each ticket to at least cover the incremental costs of the
additional passenger (I wonder just what they really are, probably less
than $100 for a cross-country round trip with one layover each way). On
the other hand, I think airline ticket prices will start to converge
somewhat. I think buisinesses are starting to react to the extreme
difference in ticket prices. This is going to result in an increase in
leisure fares, and a reduction of number of flights.
Frank
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Message is in Reply To:
 | | Re: Ebay sniper? you make the call
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| The problem with ebay is that it is trying to simulate a live auction (as opposed to a sealed bid auction) on a worldwide basis. Now a normal auction is held in one place and all the bidders (or their agents) are present throughout the auction. (...) (22 years ago, 24-Nov-02, to lugnet.market.theory)
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