I lost a few bids because someone knows my sniper limit and bid just a dollar over my limit before the snipe starts. So does the sniper post my limit on eBay or something? I don’t see the point of using this sniper if everybody knows my limit.

EX:
My limit is 70

Time left User Bid
5 min user1 50
3 min user2 56
15 sec bastard 71
5 sec me 70 <—bid too low #$%#$%

Greetings,

That’s not really the way it works. If they’ve outbid you, their bid will always be one minimum bid increment above your bid, even if they bid $100.

Nobody knows your limit (it’s kept on your computer only), but the high bidder could have bid $10,000, and since the second highest bid (yours) was only 70, it’d only show up as $71.

eBay is a ‘highest bidder, second price’ auction style, which means the highest bidder wins, but at a price set by the second highest bidder. (Generally one minimum bid increment over the second highest bidder.)

For more info on bid increments, look here: http://pages.ebay.com/help/buy/bid-increments.html

Good luck with your auctions!

— Morgan Schweers, CyberFOX!

Thanks for the reply. So if someone bid 50 and I manually bid 70 and win, I end up only paying 51? I thought eBay wants most money out of your pocket…

Greetings,

Yep, if the next highest bidder bids 50 and you bid or snipe 70, you’ll only pay $51. eBay calls it their ‘proxy bidding’, but it’s pretty straightforwardly highest bidder, second price, similar to what’s known as a Vickrey auction, from the 1961 paper where William Vickrey outlined it, using game theory to approach auction theory.W

This is slightly less true in the world of dutch auctions, which are more complex because of the ‘win X of Y’ issue, but for the common auction it’s exactly right.

eBay (and economists, whose branch of math auctions and bidding games fall into) consider the highest bidder, second price auction format to be among the fairest, reducing ‘buyers remorse’, and still distributing goods to those who value them the most. It also simplifies the bidders process, as there is an optimal and obvious bidding strategy. If I were to guess, I’d say that eBay considers it better business to get people to come back, after paying less than the ‘max’ they would have paid, than to eke every dollar from every buyer.

eBay founder, Pierre Omidyar, has said that he wasn’t aware of the math and research (at that time about 35 years) behind the auction theory when he chose that model, he just considered it the fairest approach.

Hope this info helps!

— Morgan Schweers, CyberFOX!

p.s. For what it’s worth, sniping also brings the eBay auction more in line with the classic sealed-bid style of Vickrey auction.