You have been outbid...

[nmg]

Bother. I spotted an emergency power off panel from an IBM 1602 on eBay over the weekend, and was out-sniped within the last ten seconds (I'd set my snipe for 29 seconds, figuring that there wasn't likely to be a great deal of interest in a 3kg block of metal). On the plus side, the postage would have cost me the best part of USD50.

For those of you that might be wondering why I'd want an obsolete IBM boat anchor, might I refer you to one of autopope's stories, particularly the last four paragraphs.

Comments

[andrewducker]

Did it also go for more than you were willing to pay for it?

My standard eBay practice is to work out how much I'm willing to pay and then just put that in as a bid straight off.

[nmg.livejournal.com]

Yes, I am aware of the dominant strategies in auctions of this type. That said, eBay auctions suffer some of the same problems of first price sealed bid auctions, in that they encourage bidders to bid above their true value (good for eBay and the sellers, bad for the buyers). Vickrey auctions would work a damned sight better, but I can't see most users being happy with them.

I bid what I was willing to pay, being USD50 in this case. I put this in at the end of the auction because rebidding is common (bidders initially bid less that their true value, then rebid with raised values as their bids are exceeded).

[andrewducker]

It does not necessarily maximize seller revenues; seller revenues may even be zero in VCG auctions. If the purpose of holding the auction is to maximize profit for the seller rather than just allocate resources among buyers, then VCG may be a poor choice.

Can't see it catching on then :->

Sealed bids are a good way of doing it, certainly. And I can understand not wanting to put in your bid until the last minute, because that way you avoid a bidding war.

Oh, if only people _were_ the rational actors that economists like to model them as :->

[nmg.livejournal.com]

First price sealed bids lead to over-bidding, which can be a problem (witness the 3G spectrum auciton - good for HMG, bad for everyone else).

[andrewducker]

Sorry, yes - it should go for the second bid.

The problem with the spectrum auction was that any phone company that didn't win some space on the spectrum was effectively dead in the water - which meant it was a case of pay or die. This doesn't work for much the same reason that selling critical medical care doesn't work - when you must have something its value is infinite...

[tlrmx.org (from livejournal.com)]

Hmm

eBay isn't first price sealed bid (I guess you understood that, but subsequently you don't make the distinction clear). The underlying mechanism in eBay is actually more similar to Vickrey. You automatically pay just enough to beat the next best bid by the auction's minimum increment.

The actual issue with eBay is that the bidders aren't rational. No amount of modelling with rational agents will tell you anything about how eBay works. We could try to create a system which punished irrationality more thoroughly than eBay, but that doesn't achieve anything except a sense of righteousness for people who understand auction theory.

For example, the very message you quoted exists only because eBay's customers are irrational. eBay earns nothing by telling a rational actor that they've lost the auction, they could determine this for themselves and they have no further interest in the auction because their fair price has been exceeded by another bidder. But in reality the irrational people actually using the service routinely re-bid when they receive this message.

When everyone else is insane, you have to use apparently insane tactics to get what you want. Hence the sniping.

[andrewducker]

Yup, that's kinda how I feel.

Except that I throw my hands in the air, declare I can't be arsed, and bid what I'm willing to pay straight off. If someone else wants to outbid me then fine - I'll go elsewhere and buy it there.