Ask A Genius 529 – Time for Bid: Bidding, Betting
November 9, 2019
[Beginning of recorded material]
Scott Douglas Jacobsen: If you’re trying to buy stuff other people want, how can you do it? What should you expect?
Rick Rosner: I think it is crazy, if you don’t know what to expect, to not come up with the highest amount that you’re willing to pay while punching that price in with 4 seconds to go before bidding ends.
The way eBay and other auction site works: If nobody gets close to the amount you’re willing to pay, then you only pay a little more than the price anybody else is willing to pay. Let’s say you’re willing to pay 60 bucks for something.
So, you punch 60 bucks 4 minutes before the auction ends. The strategy being that you don’t want people to have time to get in there and enter new bids to drive the price up. You want to come up with your highest possible price and hope people don’t come in.
Say the highest bid with 4 seconds to go is someone bidding 24 bucks, you enter 70 bucks. The minimum bid increment is a buck. If nobody else punches in a bid, you’re not paying 70 bucks. You’re paying 24 bucks plus the increment or the buck increase, so much less than you were willing to pay for it.
I think it’s called swooping in. I don’t understand why you wouldn’t do that. Because if you enter your price earlier, and most things are on eBay for a week, why would you give somebody a day or an hour to think about it and make the decision to spend more than they decided previously?
So, I am a swooper. If it is a thing in demand, a reasonable expectation, though not a good expectation – in that, they are wide variations in what happens. The price is likely to triple in the half-hour before the end of bidding.
It won’t always triple. It depends on the kind of bidding behaviour other people have and how many other people are interested in the thing. I had a thing. I lost out on a thing for three days until the last minute; the price was sitting at 22 British pounds.
Then in the last four seconds, I bid 64 pounds. Somebody else bid 62 pounds, and someone bid something else. But the winning bid was 66 pounds, so anywhere between 66 pounds and higher. But because I was the only higher bidder. They beat my bid by 2 pounds.
So, I bid 64. They got it at 66, which is exactly three times the price that it was sitting up to the days leading up to the last few seconds. It often goes something like that. Although, another thing I lost out on was sitting at 5 dollars for four days and then 7.50 for three days.
Then in the last few seconds, it topped out at 39 bucks. I put in a bid of 38 bucks, which was the highest bid I’d be willing to pay. Somebody else put in some bid that was higher than that. They had to pay my 38 plus a buck and got it for 39 bucks.
So, that price went up more than 5-fold in the last few seconds. If it’s something in demand or something with a few bids for it, or seems to be a neat item, or had a bunch of watchers, because often eBay will tell you how many people are watching it, then the price will jump up.
It will more than double within the last few seconds, which might be a way to tell you to not waste your time. The thing that I lost out on that was 7.50 for a long time. I had a reasonable chance of getting it for 20 bucks, 25 bucks.
Because it was sitting at 7.50 and didn’t have that many bids. Turns out, I didn’t get it because many people were swooping in, but I had a good chance to get it. But if the highest price I was willing to pay 38 bucks, and it was sitting at 32 bucks the day before, then I may have decided to not get so excited and would not have paid that much attention.
Because if a few bids made it to 32 bucks, then it would go beyond 38 bucks at the last minute, which was beyond the highest I was willing to pay. There are two ways to be lucky. The shitty way to be lucky is that thing I was looking at goes to 40 bucks with 5 days to go.
I was only willing to pay 38 bucks. Because I would have spent 5 days tracking it. The luckiest way to go is put in this bid for 38 and is at 7.50 and then I get it for 9 bucks. Because the highest the other person was willing to go was 8.50 and there were no other bidders.
The slightly less lucky way to go is to bid 38 and then I get it at 37.80 because the highest any other bidder to go was right under my highest bid. So, there you go. That’s, at least, I think bidding works.
[End of recorded material]
American Television Writer
Scott Douglas Jacobsen
Founder, In-Sight Publishing
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