Ebay Sniping
Published on 6 Jun 2006 at 1:06 pm |
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Filed under The Cargo Cults of Business, Brain Trust, Economics and the Economy.
I first heard of auction "sniping" from a couple of co-workers, about two years ago. At first I really thought they were having some fun at my expense. Watching their behaviour — both of them nearly compulsive auction snipers — and reading up a bit on it I soon discovered that they were entirely serious.
Knowing as I did that ebay allows proxy bidding I found the practice of sniping, especially to the extent that it had a name and whole websites devoted to debating its merits, what one of my co-workers called a "noodle-baker."
As an occaisional seller on ebay*, I was absolutely unable to see what the fuss was about. Recently I’ve bid on a few items and made a few purchases. I think I now have a little understanding of some of the strong feelings surrounding the practice.
Proxy bidding allows the buyer to set a maximum bid for an item, and then the software automatically raises that bid until it either meets that maximum or the auction is "won." This means that as long as one sets the proxy bid at one’s true highest price, one can never truly be "sniped."
I recently made a bid on an item. I made the bid as soon as I saw the thing, without doing as much research as I should, and the bid I made was about half of what it should have been. Since the going rate was considerably lower as the auction neared its end, I never raised my proxy amount. In the final seconds of the auction, the item was "sniped." I felt a moment of distinct annoyance as my assumption that I was getting an item for $45, when I felt it was worth $100, crumble. It had sold to someone else for $51!
Two fallacies:
1. Over the week of having the highest bid, some irrational part of the back of my mind had already "completed" the transaction. It was mine, I’d "paid" for it, etc. An unworthy thought, but true.
2. I had not actually bid the full amount I’d been willing to pay, due largely to laziness, and partly to the first fallacy above. Had I done so, I’d have reacted differently. "Better you than me, brother" would probably have summed it up, as I watched someone else pay too much.
There’s another fallacy which I suspect creeps into some people’s thinking, though I didn’t experience it, and that’s the idea of "just a few percent more". It’s similar to "in for a penny, in for a pound." When one bids $100 on something, and then someone else gets it for $101, it’s easy to convince oneself that another 1% wouldn’t have mattered. This allows for either terrific price creep or chronic dissapointment in an auction evironment.
Still, while I now understand some of the frustration with the "victims", even if it’s based on folly and irrationality, I can’t see why anyone would practice sniping. Perhaps they’re hunting for people who did what I did but that seems like a pretty low percentage game. In every other auction I’ve ever bid they would merely have paid more than I was willing to pay, and it wouldn’t have mattered when they did it, or they would have been out bid by my proxy. In the latter case, since they’re counting on how fast they can type in higher and higher bids, they’re likely to "snipe" themselves!
In the end, I think the whole thing is pretty crazy. My guess is that it’s one of those weird little quirks of humna nature, like repeatedly pushing elevator buttons, which effects some a great deal more than others. Oh well, I’ve been known to impatiently push that button, so who am I to judge. I’ll just be sure to set my proxy at my highest bid from now on and let them snipe away!
* I sold an 8 pack of old Pepsi bottles! Actually they were old enough to be kind of cool….
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