

Off the block - jeo1234
http://www.economist.com/news/finance-and-economics/21662595-economists-may-idolise-auctions-most-people-do-not-block?fsrc=scn/tw/te/pe/ed/Offtheblock

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massysett
This article focuses too much on economic theory of auctions generally, and it
focuses too much on what buyers prefer. There are some fundamental flaws to
eBay in particular that have doomed auctions, and these flaws affect seller
behavior even more than buyer behavior.

eBay does nothing to screen buyers. Therefore there are many bidders who are
not serious about buying. They bid on items, win them, and do not pay. I have
had bidders win my items and then say "I don't want to buy this item, sorry."
As a seller there is no practical recourse against these bidders.

This could easily be solved by requiring bidders to put down a deposit. They
could be required to post their entire bid amount, but even requiring some
deposit--10%, or 50%--of the bid amount would cut down on people bidding who
have no intention to buy. If you win the item but don't pay, you would forfeit
the deposit.

As it is, a bidder wins the auction and does not pay, and as a practical
matter the seller must re-list the item. This is a hassle, and time is lost.

Sniping is another problem that is easily solved. Simply make the auction more
like a live auction: each bid extends the auction time by a time period (a few
minutes, a few hours, whatever) to allow additional bids. You set a reasonable
bid increment so that this does not become a massive waste of time. eBay has
not done this either.

As a result the auction winds up being a time sink for sellers and buyers
alike, with doubtful value for price discovery. It does nothing for price
discovery if some fool bids $200 for something that is worth only $150,
especially when the fool is just jacking around and has no intention on
paying. I will never again auction on eBay. If I have something whose value I
don't know and I really want to practice price discovery, I would just post it
at a high "Buy It Now" price, with a note in the listing stating that I will
lower the price periodically until someone buys. But even that is a lot of
trouble. eBay is just too much hassle, and the auctions are even more hassle
with no benefit. It's no wonder sellers are jumping to platforms like Amazon,
especially for commodity items with obvious prices.

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rm999
The best way to buy used products since web 1.0 has either been craigslist
(local, negotiating) or ebay (online auction). But both are terribly run
companies that have let their business models fail. Sadly, they're the de
facto market leaders, and network effects mean they won't easily be replaced
or "disrupted".

IMO this isn't a failure of auctions, it's a failure of ebay.

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PaulHoule
This is old news.

A while back I was running out of space so I was selling old books and other
things and thought auctions on Ebay would be a good way to get rid of the
stuff since the stuff would be gone in 7 days.

Unfortunately it wasn't. Many of the auctions had no bidders, so this was not
a working discovery mechanism.

One issue with eBay, the Amazon Marketplace and many other online marketplaces
is that you don't get to see the bid and ask spread. That is, you might see
somebody selling a book for $135 but you have no idea if anybody will buy the
book at $135 or even $35 for the matter. This uncertainty creates conflict for
anyone who wants to participate in the marketplace.

I did some searching on the web and found a market maker, who had me type in
the numbers for my books, movies and video games and gave me a quote. I put
the stuff in a box, and they paid me by e-check.

Another ebay killer is the emergency of Etsy. It used to be that you could
find quirky things on Ebay that you could not get in stores, but now so many
stores list inventory on Ebay and the quirky stuff is on Etsy.

~~~
sosuke
"market maker"? What is that and how did you find yours? I'd love to see what
I could get for some stuff that is just taking up space.

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sosuke
EBay was wonderful, like most services it started off with normal people
buying and selling their junk or stuff. Then you have sellers coming in to
"make a living" on Ebay flooding the market with retail priced items. You've
got buyers coming in who don't pay. These are hard problems to solve and have
hurt other platforms. I have lots of stuff to sell, but I'm not sure I'd turn
to EBay and have to compete with the flood of actual junk.

Pinterest has so much marketing spam now it is painful. Etsy has turned to the
mass production sellers to turn up profits.

Increasing the bid when a bid is places is infuriating, if you want that stuff
go to the penny bidding sites. Sniping only happens if you didn't set your bid
to a level you were comfortable paying. If someone goes over that bid then you
aren't out anything you weren't ready to part with.

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gadders
From the article:

>>Even for the snipers clever or lucky enough to make the winning bid, this
process takes time and energy.

I'd be surprised if most if not all snipes were't automated. I don't think
people sit round their PC with their finger on the buy button as the auction
counts down.

~~~
dropit_sphere
Which raises the question: why not extend the time after the last bid that
raises the price? Is this not how regular auctions function?

Another idea is: why doesn't eBay write their own bots for users to use, and
call it a "bidding strategy"?

~~~
Ao7bei3s
> I'd be surprised if most if not all snipes were't automated. I don't think
> people sit round their PC with their finger on the buy button as the auction
> counts down.

Most non-technical people, heck, even most technical people I know who use
eBay regularly, don't use snipers. (Too bad for them.)

> Another idea is: why doesn't eBay write their own bots for users to use, and
> call it a "bidding strategy"?

eBay takes a percentual share of the selling price, so they have an interest
in high selling prices. Making sniping easier would lower selling prices. When
all (or most) bidders will make bids shortly before the auction, and - which
is the important part - see each others bids and respond to them, that drives
up the selling price "nicely".

~~~
exelius
> eBay takes a percentual share of the selling price, so they have an interest
> in high selling prices.

They could also charge for snipe bots; setting off an arms race inside their
platform which they profit from. I mean, it's scummy, but so is every eBay
seller at this point.

~~~
Ao7bei3s
I doubt that'd work; I don't think they could make it expensive enough that
they don't loose money without driving users to free sniping tools.

(It's funny that there's a fee for the auction scheduling feature when good
auction scheduling _increases_ selling prices.)

~~~
exelius
Easy, just charge say 1% of the selling price to snipe. Your "pro" buyers will
still flock to free tools (because they know how to use them) but occasional
buyers might go for it. They also have the "Buy it now" feature which kind of
does the same thing.

