The culture and strategy and ebay and other online auctions.

43 responses total.

I've now made a few purchases via ebay, and am somewhat puzzled by the
culture of online auctions: why do people bid none-whole dollar bids
(50.01, 50.55, 50.99)?; why do the winning bid prices fluctuate as wildly
as they do for successive identical items?; how much bidding is done in
the last minute of an auction (I have found this to be a good strategy, so
also, why is any bidding done in advance of the last minute)?; where do
people get all of the identical items for some auctions (I was looking for
an Olympus D-340R digital camera - there are dozens being auctioned,
although they are not available at retail anymore - but the winning bids
are fluctuating over a range of at least +/- 10% of the last retail
price). 

What are your experiences - and strategies?

Just to be a wet blanket:  did you see the news reports of the local boys 
(they weren't, mind you) who used ebay to fence goods stolen from local
stores?  I can't help but wonder how much of the stuff offered has a similar
provenance.

A camera that is no longer available at retail *probably* is less likely
to be stolen goods.

One of the ways people get those sorts of goods is by looking for store
closings.  I went to the CCS auction late last year, and it was
fascinating to see what was there to be sold.  I used to wonder how
people showed up at things like the dayton hamvention with piles of
weird goods, now I know.  The auction house that sold off the goods at
CCS is a regular business - you can sign up and get fliers for each of
their auctions; so you could probably make it a regular business to show
up at the auctions, bid on goods, & sell them (on e-bay or wherever.)

I have bought hundreds of books through Ebay.  Given the relatively low
demand for the kinds of items I'm buying (books with data that would be
useful for my web site), and given also my unwillingness to pay high
prices or get into bidding wars, waiting 'til the last minute would be
silly and self-defeating. 

I focus my attention primarily on useful books which have low opening
prices, no reserve, and no bidders.  I am almost never interested in
paying more than about $6 for a book including shipping (these are books
which can rarely be found in used book stores for less than $10 or $20).
If the item description doesn't mention shipping at Book Rate, I write to
the seller to ask if it's available.  Book Rate is a subsidized postal
rate for shipping books -- slow but cheap.  The 85 cents USPS insurance is
an extremely bad deal on a $3 or $5 item given the 1/3000 risk of loss, so
I always reject insurance.

If someone else bids on an item before I do, it is usually pointless for
me to bid.  If the minimum/opening bid is extremely low, sometimes I'll
try a bid, and usually discover that their maximum bid is more than I'm
interested in paying for an item; in other words, they automatically
re-overbid me.  All I've accomplished is increasing their price, and
possibly alienating them.  Therefore, if it's a buyer who I know to have
similar tastes, I have all the more reason not to want to bid against
them, since I don't want them to retaliate by bidding against me.

Undoubtedly, others who come across items where I am the first and only
bidder have the same calculus, and are discouraged from bidding.

Therefore, it is in my interest to find the items as EARLY as possible and
stake my claim by bidding on them.  Waiting 'til the last minute only
gives others a shot.

Obviously someone who wants to pay more than me can then overbid me, and
this happens about a third of the time.  That's okay (and my Ebay
"AboutMe" page promises that I will never come back and manually bid up
the price after being outbid).  The same book -- or a similar book with
much of the same data -- will be available later at a more reasonable
price.  Ebay rewards patience.

I just entered into a Dutch auction of 5 identical items. In a Dutch
auction the highest bidders get the available items at the lowest price
any of them bid. I had been bidding on similar items one at a time and
always being outbid (above my maximum). I decided to wait to the last
minute to see how things stood, and then make a bid. One minute before the
auction end I bid to be the third highest. In that same minute two other
bids were made, one the highest of all and the other one that would have
been among the five highest except for the high bid and mine. This all
means that there were at least three bidders watching at the last moments. 

Just four mimutes before the end of that auction my browser crashed even
though at that moment I was just waiting. The coincidence did make me
wonder if someone could intentionally cause that. (I just *wondered* - not
believed....I'm not paranoid except when everyone is against me.....  8^}
).

I can understand polygon's approach for rare but inexpensive documentary
items for which there are alternatives, unless of course they are *very*
rare, and one simply *must* have it. This happens with very rare cave
books. It is not so much the content that matters as the author, edition,
and condition. No one defers to anyone else!

I don't believe there is any book on Earth of which I simply must have a
specific copy.

One relative advantage I have over other collectors is that condition
makes little difference to me, as long as all the information is there.

  Although the bidding rules are different for the dutch auction Rane
  was participating in, most E-bay use proxy bidding.  From their FAQ:

    Q.  What is eBay's automatic (proxy) bidding system?
    A.  First, you specify the maximum amount you want to bid. That amount
        is kept secret and is your proxy bid. 

        The system will bid for you as the auction proceeds, bidding
        only enough to outbid other bidders. If someone outbids you,
        the system immediately ups your bid.  This continues until
        someone exceeds your maximum bid, or the auction ends,
        or you win the auction!

        Plus your proxy will never exceed what you're willing to
        pay for the item.

I don't bother with bidding at the last moment.  I set my proxy bid at the
most I'm willing to pay, and don't touch it after that.  If I get outbid,
the item went for more than I felt it was worth to me anyway.

A lot of people bid in round numbers, so I suspect the idea of bids like
$50.37 is to edge out everyone who bids $50 as their maximum.  Some people
will also bid repeatedly near the end of an auction, in small increments,
trying to find the other bidders' maximum price and exceed it by as little
as possible.  There are always ways to work any system, I suppose.

Re 8 (1st paragraph): Right, exactly.

Just recently, I bid on a book with a $1 minimum.  My maximum/proxy bid
was higher, of course.  Someone bid against me without exceeding my max,
so I ended up paying $2.35 for it.  But that's a rare case.  Almost
always, I either end up paying the minimum (even if it's as low as 25
cents), or a competing bidder takes it away from me completely.

The competing bidder usually shows up, if at all, at the very end of the
auction, and gets the item for my maximum plus one increment.  Therefore,
either I get the item for cheap, or I in effect set the price at which it
sells.

This makes for a tricky decision as to where to set the maximum.  A high
maximum makes it more likely that I'll get the book, or else it "punishes"
the competing bidder for bidding against me by making them pay a higher
price.  On the other hand, a high maximum might be bid against without
being exceeded by the other bidder, resulting in a higher acquisition cost
to me.  And if a particular book sells for a high price, it helps build
the unhelpful-to-me notion that these books are worth a lot of money,
and might cause sellers to raise the bid minimums.

Even if a book is special enough that I might pay $10 for it in a used
book store, I would be reluctant to set my maximum that high, even
discounting for the cost of shipping and the 33 cents to mail the check. 

So I generally set my maximum for somewhat LESS than the book is "worth"
to me, because in the long run I can buy more books by being very
conservative and focusing on the best prices.

When I was still quite new to Ebay, I saw a book I wanted, offered for a
minimum bid of $6, which struck me as cheap.  I hastened to offer a bid. 
Very soon afterward, I found the same book (identical in every way) 
offered by a different seller for $1.  Oh well, I said.  Then somebody
overbid me on the $6 book!  I bid on the $1 copy and got it for the
minimum.

Just to clarify - "Dutch Auctions" are used only to offer several identical
items at once. Such are less common, of course, than single items being
auctioned, when it is by Proxy Bidding. I don't bid my "maximum" right
away even in a Proxy bid either, as that seems to force up the price
when others 'feel' for just over my maximum with incrementally increasing
bids. In fact, proxy bidding seems best for when you just want to make
one bid and then not look again until the auction is over. It is *very*
difficult to do that! (These points are all ramifications of the 'tricky
decision' to which polygon refers - and why I started this item, in order
to compare notes and comprehend a wider variety of strategies.)

        Instead of the proxy re-uping the bid very soon after being 
out bid, it seems like i would want to wait (total minutes left in
auction / some constant).  Why let two bots battle when you don't
even get to see the Rock'm Sock'm fight?

This is the logical course of action for everyone. All bidding does
is cause the price to increase. If no one bids, the price will be
very low or just the reserve. THEN you bid in the last minute of
the auction. Since first bids tend to be lower, this strategy would
tend toward even the winning bids to be lower than with interactive
bidding. (Maybe this is what shut down ebay today - thousands of
people bidding on a widget at the last moment...  :)).

Just heard on NPR that it was a vandal that took ebay down.  Also took down
amazon.com, buy.com and a few other big sites.  It has gotten bad enough that
the FBI has become involved with the investigation.

Yep, its a good bidding strategy, put a low bid on an item you want to
buy and then take down ebay for the duration.

More cybervandalism reported today.  Speculation from cyber-paranoids
that it's the NSA covertly making the case for 'Net surveillance.
I *hope* they're wrong about that.

I dunno. I can just see a group of hackers giggling...

I had been watching an item I sought (obsolete software...) and planned to
just bid on it at the last moment if the price was still low. Then I
forgot about it...and 'woke up' when it was just four minutes to the end
of the auction. I managed to connect, log on, put in a bid above the
current bid level - get outbid - put in another bid (at my limit), and
won. This meant that someone else (or more than one other) was also
bidding at the last minute (literaly). I expect that if we had tried to be
the high bidder during the week before, it would have been a game of
"chicken". As it was, it was a quick game of "parry and thrust".

The whole web (everything I tried to connect to) Tuesday night was
bogged down. Would these attacks on just a few big sites cause the
whole web to slow down? 

        I wouldn't be surprised to see some company announce that they 
now have software ($100,000 per site) to reduce the impact of this
DoS attacts within the next week.  Better have stock in them before
they announce.  Of course, I would be warry of such a company or person
having the right software just after these attacks.

        You shouldn't be, really.  Of the modern breed of hacker, most of them
fall into the category of those who get their information from people who
actively seek out security exploits.  Those people also generally work on a
patch, or at least contact those who are beholden to work on a patch, for the
exploit, at the same time they release the information about the
vulnerability.

        Patches generally follow for responsive software vendors within a week
or so, within days for popular open-source software like Linux.  And generally
they're free.

(Re #20: If the last paragraph were true, this means that MS is 
unresponsive, right?)

        I believe that's the definition of unresponsive.  I'm generalizing a
bit - occasionally someone will post to Bugtraq in frustration after months
of trying to explain a security hole to the vendor, and recieving no response,
and occasionally a bug will be completely covered up.  But it's a common
pattern for non-Microsoft software.

re#16: Personally I wouldn't be a bit surprised if you are right.  Just
like the BATF 'attack' at Waco was in fact a 'PR gig' (witness all the
preop notification to news organizations) to oppose moves to abolish the
BATF and incorporate its area of operation into normal law enforcement
agencies such as the FBI (proposed once again in the past weeks by a
'bipartisan commission'), the recent 'hacker attacks' of e-commerce
sites (none of great significance to the economy) might very well be a
provision of 'the problem of the Internet' that 'The Government' is the
only suitable entity to 'resolve'.
re#17: I can see that too. It doesn't take a rocket scientist to
download copies of 'trino', 'tfn', or 'tfn2k' et al  (you want copies,
you should send me email otherwise use a search engine to find) and use
other quite well published 'exploits' to install them on any number of
unsuspecting hosts to duplicate the past week.  And it doesn't have to
be an 'official' policy of the Government to have one or two 'rogue'
employees do so in support of Government aims.

It would be a real shame if the US Government joined such notables as
the PRC, and the Myanmar Peoples Republic (used to be known as Burma) in
any way restricting the Internet in any way.

        Never assume a consipracy when simple incompetence will explain it.
I've had to testify before about corporations that've gone so far as to file
with the FBI before admitting their hacker was a typo by an employee they
didn't wish to lose.

I think it's been stated that the time lag between a security hole being
publicized on CERT.org and it being widely exploited is on the order of
three hours.

        CERT doesn't seem to be as much of a hacker's tool, though - they don't
list exploit source code, generally speaking, in their alerts.

but you can find lots of sploits on various security lists and sites. take
a look at www.securityfocus.com and www.rootshell.org for two examples

        Yes, I'm quite aware of those.  I'm pointing out legitimate security
tools like CERT do not list the exploit source code so that people can
"verify" it - they only give that to the developers who need the source code
to fix the problem.  It's all a bit moot with open source, however, but open
source projects tend to be fixed fairly quickly.

Oh, I wasn't criticizing CERT.  Don't get my wrong.

Now linked to cyberpunk due to drift into security issues.  j cyberpunk
to discuss the ethics of "white hat" v.s. "black hat" hacking/cracking,
computer secuirty, computers and society, etc.

And to discuss "red hat" hacking, check out the jellyware conf.

(sorry, I couldn't resist.)

ooooh, that was bad.

re #31 touche <raven bows and curtseys>

I made an interesting observation the other day from my UNIX box.  Go
to some of these big sites that were hacked and look at what server
software they're running.  Microsoft-IIS/4.0 (or 5.0) on most of them.
Enough said. :)

        Of course, most of the boxes hacked (to be perfectly fair) to generate
the non source-spoofed motley crew of attacks were Solaris.

One consequence of using ebay is that I've been swamped with spam 
offering merchant accounts. I haven't kept tracks, but it must be
more than a dozen similar e-mails from different merchant account
vendors. (This is on another ISP, not Grex.) They all tell one how
to "remove" yourself, but I'm not sure this works as they would
have my address as @domain.org, but my return e-mail goes out as
@server.domain.org. This is a problem here on Grex too.)

That's the least of the problems.  If you send mail to the remove addresses,
they will just know they have a valid address and add you to more lists.

Supposedly Ebay excludes data-collecting robots from its site (indeed,
someone is trying to get them in trouble over this).  I got plenty of
spam offering merchant accounts even before I ever used Ebay.

My main email address receives about 80 email messages a day, of which
no more than probably two or three are spam.

I only complain to the ISP's and uce@ftc.gov if the spam is an illegal
pyramid scheme (particularly if it claims to be legal) or contains
threats.

Re #37: YIKES - I've become an unwitting spam vector. Stay clear!

You must move in circles where the merchant account sharks are found.
I hadn't been using my other account for other than (semi)professional
communication until I started using it for ebay...hmmmm, I also
recently bought air tickets on a web site. Are they lurking there, too?

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