What do You Want to Know about Auctions?
In the internet age, auctions are everywhere. Auctions are used in eBay, Craig’s list, Google Adwords, dating websites, and job websites—just to name a few.
Auction theory can help you navigate the uncertainty. You can improve your position as an informed buyer or seller. I’ve used the auction theory to buy for less and sell for more. It’s even helped me in a job interview. It’s great knowledge to have in your arsenal.
A lot is known about auctions, but the knowledge is locked up in technical math. And that’s where I hope to help, as math is an area I enjoy navigating. I want to decode the equations and present an intuitive look at auction theory. I have some article ideas in mind, and I’m open for suggestions from you.
What are the topics you want to know more about? Ask about the auction types, listing or buying on specific auction websites (eBay, etc.), auctions in the news, or anything else that comes to mind.
Please write your questions and ideas in the comments. I’ll use the best questions to motivate upcoming game theory articles on Tuesdays.
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9 Responses to “What do You Want to Know about Auctions?”
Hi Presh,
I recently bought a camera on eBay.
It was a specific model of camera, purchased refurbished from the manufacturer. They sell many of them a day so I had a good set of data to work with:
http://spreadsheets.google.com/ccc?key=pAhWbKpExoTJjcd3bus2QRA&hl=en
As you can see, there was quite a difference in the auction prices over my sample period. I started bidding the next day.
Keep in mind these are the same product from the same seller, example here:
http://cgi.ebay.ca/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MEBTOX:IT&item=250238475237&_trksid=p3984.cTODAY.m238.lVI
The only difference was that there were four colors available.
I tried bidding on 8 auctions using the median price as my maximum bid, but was consistently outbid. I finally gave in and bought one on the wrong side of the curve, paying $187.
It was a fair price to me, but I was a little dissapointed that I had to pay more than the average price.
Anyways, your post was timely as I was thinking about this. Any insights you can add would be great.
Regards,
Anthony
By Anthony on Apr 25, 2008
I had a friend show me how bid sniping worked on eBay…it’s very simple, and would seem to be the most effective strategy in getting the best price. It requires patience, the bid has to be realistic (ideally below average) and you can’t get caught up in the moment to raise your max bid if it’s not high enough. I’d like to hear your take on it.
By Jeremy on Apr 25, 2008
Anthony: You raise an interesting problem indeed. I’d first like to point out that in practice, I am fine paying a reasonable price rather than the best optimal price.
Now as for how you can get the best price, as Jeremy points out there are subtleties on eBay. It is not just what you bid but how you bid. I’m guessing bid sniping played a role in the lower prices. I’ll add bid sniping as a topic for a future article.
I appreciate the Google spreadsheet link, but it appears I am not authorized to view it. Can you “publish” it so we all can see or email me the spreadsheet? I am very interested at seeing the data.
Thanks.
By Presh Talwalkar on Apr 25, 2008
Jeremy: Thanks for the suggestion! I will flesh out my ideas into full-blown article. The short answer is that sniping works because the eBay auctions have fixed closing times.
By Presh Talwalkar on Apr 25, 2008
Whoops… I just realized that I included the actual document link and not the published link. This one should work:
http://spreadsheets.google.com/pub?key=pAhWbKpExoTJjcd3bus2QRA
By Anthony on Apr 28, 2008
General Motors and eBay are expected to announce Monday that hundreds of the auto maker’s California dealers will let consumers haggle over the prices of new cars and trucks through the online marketplace, as part of a previously disclosed trial
Source: http://en.autos.sympatico.msn.ca/news/canadian-press-car-article.aspx?cp-documentid=21102515
Could you share your thoughts?
By Benjamin Vitale on Aug 11, 2009
Around this time of year I get very interested in auction theory — thanks to my auction draft fantasy football league!
It works just as the name implies, every team has a budget (usually around $200). NFL players are nominated and the league owners bid. Eventually one owner bids the highest and wins that player. (Often times this also is a great example of the winner’s curse, as to get a player you will sometimes have to pay a little bit more than you wanted.) There’s no sniping as there’s no time limit on bidding — it ends with the traditional “going once, going twice… sold.”
Has auction theory been applied to fantasy sports auction drafts?
By Craig on Sep 2, 2009
I would recommend going through a car auction of any kind when it comes to purchasing a new or used car for sale the money that you will save is massive. There are all sorts of cars to choose from too.
By clifford on Jan 29, 2010
Here’s another example of auctions :
The Citizens’ Candidate initiative, in Utah, is using Craigslist to find applicants willing to run against Democratic incumbent Congressmember Jim Matheson.
The Citizens Candidate initiative was co-founded by Tim DeChristopher:
http://www.utcitizenscandidate.org/
By Benjamin Vitale on Jan 29, 2010