HN Explorer

Ask HN: Why do people bid early on eBay?

1 points by curiousgeorgio ↗ HN
Lately I’m seeing people get into bidding wars on my eBay auctions (popular, high-priced things like Apple products) within the first day of a 7-day auction (no "Buy It Now" or reserve price). It's driving me crazy trying to understand the rationale driving the behavior when “sniping” is pretty much always better for the buyer.

So far, I'm thinking it could be one of three things:

1. People think eBay works like a traditional English auction where it ends after a period of bidding inactivity. If so, they are mistakenly hoping no one else sees the auction for a while and that they'll somehow win before the auction's end date.

2. People are using a "shotgun" approach, bidding (low) on a large number of similar items, and not really tracking any one auction closely. They're hoping to win something if they bid in enough auctions.

3. People think eBay is small and that no one else will see these popular items before the auction ends.

#1 doesn't seem very likely since many of these people have high feedback scores and are presumably familiar with eBay.

#2 seems more likely, but is a bit disturbing because it indicates these people are probably committed in their bids to purchasing much more than their budget would allow. Fortunately, they probably win so rarely that they aren't on the line for too much, but it could be dangerous if they win many of the same/similar items (why eBay doesn't allow sellers to target only buyers who have the funds available via PayPal is beyond me - I've been stuck with non-paying buyers on eBay on numerous occasions and it's really annoying).

#3 would still be irrational - that is, even in a limited market, it'd be advantageous to wait and bid late.

Any insights here? Is there a good reason for this behavior, or should we just assume that these people are... lacking in intelligence (trying to rule that out as an option)?

5 comments

[ 4.6 ms ] story [ 23.0 ms ] thread
serf
I've bid early in the past when the bid itself was rather high compared to he item value (helping to ensure the purchase) when I've come across an auction without BuyItNow enabled.

This is due to 1) personal need for the item, 2)the threat of being unable to access the computer or auction at the auction end time, 3) the lack of effort towards setting up an automation of some sort to do it for me.

Sniping is better for the buyer, I agree. The effect is just too small on certain low cost items for me to give a damn.

curiousgeorgio
That makes sense (especially the part about not having access to bid closer to the end time) for something cheap or with few alternatives.

Still doesn't make sense to me why these people are bidding - mostly lower than the item value - for things like iPhones that have literally thousands of eBay auctions going on at any given time.

curiousgeorgio
BTW - a web search for this turns up some very... interesting results of people trying to defend the practice of early eBay bidding. The "logic" consists of stuff like "waiting to bid at the end only gives time for more competition to bid, so it'll be priced higher". Hmmm... makes my head hurt :)
pollen23
I really haven't done auctions in years, but with the way ebay works, with the current price one bid increment above the previous bidders maximum price, what's there to gain from sniping? You wait until the last minute or so, and then _hope_ that the leading bidder has set a lower maximum price than yours? Or hope that they don't understand how ebay works, more likely.

Personally, I would put in a bid whenever I found something I was looking for, and then wait for the email telling me I'd won, if ever. No emotional investment, no getting caught up. I'd just figure out what's the most I'd pay for something, and then go.

dragonwriter
> It's driving me crazy trying to understand the rationale driving the behavior when “sniping” is pretty much always better for the buyer.

Bidding the maximum you are willing to pay early is better for the buyer in pretty much all cases. The only real benefit of sniping is that you don't spend time with potential liability hanging out.

> Any insights here? Is there a good reason for this behavior

From your description of the kinds of items -- high-price commodities with high volumes trading on eBay -- one possibility is that its people who are also selling the same products supporting the prices by making sure that there aren't auctions for the same goods open at very low prices for long (in the unlikely event that they somehow do end up winning some of the auctions because the auction slipped through everyone else's radar given the large number of similar items, they can just turn around and sell the items.)