On Thu, May 03, 2001 at 09:10:05AM -0400, Carlos Murillo (cmurillo_at_emtelsa.multi.net.co) wrote:
> At 08:22 AM 5/2/01 -0600, Robert Feldman wrote:
> >Flooding can be blocked if you take advantage of proxy bidding. Just decide
> >what your _maximum_ bid is, and enter that amount (near the end of the
> >auction, if you want, but not at the last second). Your actual bid will only
> >be the minimum increment above the next highest actual bid (and not
> >necessarily what you are willing to go up to).
> -snip-
>
> And at 07:51 AM 5/2/01 -0700, Marvin wrote:
> >The short answer is yes. The DNF (Discuss Newest Features) board has a
> >sniping contest at 22:22:22 PDT Ebay time and the highest I've seen is 39
> >posts in that one second. And to say again, sniping only works against
> >bidders who either do not know or are not willing to bid what an item might
> >be worth. I think that "stategy" you are talking about is just ignorance of
> >the system.
>
> Sigh. You guys are taking the position of lots of economists when
> discussing real-world markets, saying that the theory supports
> the well-behavedness of the market and neglecting the fact
> that the assumptions that were necessary to prove the theory
> do not apply to the real problem.
Nothing you've quoted suggests that they're taking that position. They
*do* suggest that bidding your maximum bid at the outset and letting
it sit there will let you win the auction if no-one is willing to bid
more than that. That's an awfully big "if", though -- and in Robert's
example, I don't see where bidding late helps; it'll have an effect on
what the sniper pays, but not on what you pay. (Actually, if you bid
your maximum early, you can punish the sniper. I think.)
No-one's saying that eBay clears; they're just saying that there are
strategies that, if you know your maximum bid, will get you the item
if your maximum bid is the highest.
> Thus sniping is born. Sniping is a sensible strategy in an eBay
> auction with irrational bidders.
Well, sniping is rational if the disutility from having to snipe is
small enough to not offset the savings. If the disutility of having to
snipe is high enough, bidding your maximum at the outset is
rational. Most popular accounts I've seen omit the disutility of
having to snipe.
(Of course, if the disutility of having to calculate your maximum...
well, you know.)
I'm inclined to say -- but certainly haven't worked it out -- that
bidding below your maximum mid-auction is the only dominated pure
strategy, and that it's strongly dominated.
I certainly won't claim that eBay is efficient, though.
-Rich
--
------------------------------ Rich Lafferty ---------------------------
Sysadmin/Programmer, Instructional and Information Technology Services
Concordia University, Montreal, QC (514) 848-7625
------------------------- rich_at_alcor.concordia.ca ----------------------
Received on Thu May 03 2001 - 11:56:38 BST