Subject:
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Re: why eBay proxy bidding is broken
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Newsgroups:
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lugnet.market.theory
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Date:
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Mon, 11 Oct 1999 16:42:46 GMT
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Viewed:
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435 times
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From a seller's standpoint, a proxy bid is not as powerful as a "FIRM" bid. A
proxy is better than a minimum bid (with no proxy) though.
High Firm Bid
--------
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(proxies in here somewhere)
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--------
Minimum Bid
The question is, where should a proxy fall in between the two? There are many
different answers to several questions. What do you (AFOLs) think:
1. Should a new bidder have to beat an existing proxy by the bid increment?
If yes, proxies are more like a firm bid
If no, proxies are more like a minimum bid
My answer: Yes (I agree with Larry's argument) Giving a proxy this power
makes it a stronger proxy, benefitting the bidder.
2. Can a bidder retract/lower his/her proxy bid (given that FIRM bids cannot be
retracted)?
If yes, proxies are more like a firm bid
If no, proxies are more like a minimum bid
My answer: I must also say yes to this one. In this case, making the
proxy more like a firm bid is a benefit to the seller. However, I
feel that, if answer yes to #1, I should answer yes to this also.
(If I give added power I should give added responsibility.)
3. Can a bidder raise his/her proxy bid -without- rebidding on the lot?
This doesn't seem to apply to firm or minimum bids, so I can't compare
them.
My answer: I don't know, but I tend to lean toward yes. This gives the
existing bidder a tremendous advantage, though. Suppose someone
has a lot proxied to $50.00, increment $1.00. Someone else comes
along and bids $50.01. From my answer in #1, the original bidder
keeps the lot at $50.00. Should the original bidder be allowed to
then raise his proxy to $53.00 while keeping the lot at $50.00 or
should he have to rebid at $51.00 to get a proxy at $53.00?
4. In mulitple identical lots, should one person's proxies fight each other?
My answer: Yes. A person who just wants one lot at a high price should
not have to bid over and over again to beat existing proxies that
are "working together". This seems to defeat the point of proxy
bids. This is still hard to explain, though. To try once again
to clarify multiple identical lots, I plan to do them in a dutch
format in my next auction. For instance, I will say that I have
"ten lots of 5 2x4 red bricks each." A given bidder can say how
many he wants at any given price level, and he can hold some at
different price levels. For instance, a bidder could want one lot
for up to $2.00 but only proxy the other 9 to $0.50. This makes
perfect sense to me, because it lets bidders act out "I really need
5 of these, but I could use 50 of them."
Can anyone else think up more proxy questions? As always, I am open to good,
convincing arguments that I should change my opinions. I am rewriting my
auction software now and would like to know what people like best.
Thanks,
Naji
In lugnet.market.theory, Larry Pieniazek writes:
> <snip>
> Suppose we use Eric's numbers but lets start at 45. What many auction
> sites do is as follows.
>
> PF has it for 45 but has a proxy for 50
> EB bids 50.01 proxy.
>
> The auction software kicks in... EB has a bid of 46 placed (the first
> proxy bid) PF *also* has a bid of 46 placed and is treated as having bid
> first. He holds. Now EB has a bid of 47 (next proxy bid) and PF *also*
> has 47 and was first... on up to 50... EB has a bid of 50 placed but so
> does PF. EB's next actual bid is for 50.01 which is too small to beat
> the min increment and therefore EB does not win.
>
> Now, I claim that is fairer. PF was ready to pay 50 FIRST. He needs to
> be beaten by the min bid increment, or 50+1.
>
> <snip>
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Message has 1 Reply:
 | | Re: why eBay proxy bidding is broken
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| (...) Yes. I haven't seen any disagreement on this one, except from e-bay. :/ (...) No. Philosophically, AFAIC, a bid is a bid - proxy or not - and shouldn't be retractable. There is also at least one practical problem with proxy retraction: timing. (...) (25 years ago, 16-Oct-99, to lugnet.market.theory)
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Message is in Reply To:
| | Re: why eBay proxy bidding is broken
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| (...) preface: eBay can do it whatever way they want. And the URL given later in the thread makes it clear they acknowledge the way they do it may result in a bump. Their place, their rules. My thesis is NOT that they "can't" run things that way, (...) (25 years ago, 8-Oct-99, to lugnet.market.theory)
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