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Bidding on Ebay Living with Snipers

"I hate it when somebody bids a minute before the close of auction; it's unfair!"
        protestation of an eBay buyer who bid $25 and was outbid by a last-minute sniper

My high school chemistry teacher used to say, "life isn't fair ... not only that, it's not even uniformly unfair."

As a bidder on eBay, you're facing two kinds of bidders: snipers and others.  eBay tells you not to be a sniper, but their system encourages it.  If eBay were serious about eliminating sniping, they could

  • offer sealed bid auctions
  • offer a keeps-going-until-nobody-bids-anymore auction (similar to a live auction)
  • making the end time of an auction slightly random so that sniping would disappoint snipers as often as snipees
  • impose a penalty for sniping

    However, these practices have drawbacks of their own.  Sellers want the highest selling price and a fixed ending time, and everybody wants a free and open market; sniping is a necessary consequence.

    eBay tries to shield itself against the disappointment of bidders by instructing them to

          Bid the highest amount you're willing to pay

    ... but that only makes sense if there were such a price.  You bid $25 ... was that really the highest amount you were willing to pay?  Presumably not, since you felt that somebody else getting it for $26 by sniping was unfair.  If they'd bid $26 earlier in the auction, you would have bid more, right?  eBay would tell you "if you feel it's unfair, it's your own fault for not obeying us when we told you to bid the highest amount you're willing to pay."  But in fact, you can't bid the highest amount you're willing to pay because you don't know what that amount is.  The perceived value of the item varies depending on how the bidding progresses.  From the seller's point of view, that's the beauty of the auction process: by playing the bidders off against each other, they bid more than they might under other circumstances.

    I bid differently depending on why I'm interested in an eBay item:

  • it's easier/cheaper to buy it on eBay than elsewhere
  • it would be fun to have it if it were cheap enough
  • I really want it and don't know where else to get it

    In the first case, I only bid on Buy It Now items from sellers that accept PayPal payments, and I always get the item.  In the second case, I bid immediately (and low), expect to be outbid, and am pleasantly surprised if I'm not.  In the third case, I snipe.

    In picking my snipe bid, I ask myself the question I think eBay should tell its buyers to ask themselves:

          What bid is so high that if I were outbid, my relief at not having to pay that much would outweigh my dismay at not getting the item? 

    That way, I'm never disappointed.

    By sniping, I'm turning it into a sealed bid auction between me and the other snipers (since nobody has time to re-do a last-minute bid).

    If there are no snipers, I'm only sniping the non-snipers (or, sometimes, nobody).  If a non-sniper contacts me and says "I made a mistake, if I'd known there were going to be snipers, I would have bid higher, or sniped," I tell them what my snipe bid was; if they're willing to pay that (plus 20% for my trouble), I'll sell them the item.  So far, nobody's taken me up on that offer, because my snipe bid was in fact more than they were willing to pay.

    When there are several snipers, the snipe bids are typically significantly higher than the non-snipe bids, which leads me to believe that snipers actually do want the items more.

    I agree that the system is unfair, but I don't think it's unfair in the way a bidder might feel it's unfair after being sniped.  By refusing to participate in a bidding war against other bidders, a sniper is denying other bidders the opportunity to bid up the price the sniper ends up paying.  If, as is usually the case, the sniper is the highest bidder, this means that the seller is coming out short (which is usually not the injustice a sniped bidder is complaining about).  I've never had the seller complain that I'd won the item by sniping ...  What I think is the most unfair is that eBay isn't being open about the nature of the system, explaining their reasons for making it the way it is, and helping bidders participate in a way that doesn't lead to disappointment.