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  • Disarming the Bid Sniper

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    76433_1.pdf (400.3Kb)
    Author(s)
    Trevathan, Jarrod
    Read, Wayne
    Griffith University Author(s)
    Trevathan, Jarrod
    Year published
    2011
    Metadata
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    Abstract
    Bid sniping is the most common strategy used in online auctions whereby the bidder places a bid in the closing seconds in order to win the auction. This denies other bidders the time to react and suppresses the final price. While bid sniping is beneficial to the winner, it disadvantages other bidders and the seller does not get the full amount of revenue s/he might otherwise have received in a truly competitive and fair auction. This paper proposes a method to help negate bid sniping as a dominant strategy for winning in online auctions. We propose an amendment to the auction format that allows for a random undisclosed ...
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    Bid sniping is the most common strategy used in online auctions whereby the bidder places a bid in the closing seconds in order to win the auction. This denies other bidders the time to react and suppresses the final price. While bid sniping is beneficial to the winner, it disadvantages other bidders and the seller does not get the full amount of revenue s/he might otherwise have received in a truly competitive and fair auction. This paper proposes a method to help negate bid sniping as a dominant strategy for winning in online auctions. We propose an amendment to the auction format that allows for a random undisclosed time-out extension should new bids be received in the closing moments. This entices bidders to bid their true valuation up front, otherwise they risk having the auction terminate and therefore not accept any new bids. Several variations of the amended auction format are presented that effectively counteract bid snipers by making it difficult to gain any information by observing the underlying algorithm. To ensure the auction does not continue indefinitely, the format includes mechanisms that place random bounds on the size of, and number of extensions permitted. Our proposal also makes intelligent decisions to maximize the price for the seller based on the auction's bid volume. The size of the extension granted is based on the timing and aggressiveness of how bids are being submitted. To our knowledge, no existing online auctioneers offer such a comprehensive format for actively discouraging bid sniping.
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    Journal Title
    Journal of Electronic Commerce Research
    Volume
    12
    Issue
    3
    Publisher URI
    https://www.csulb.edu/
    Copyright Statement
    © 2011 Journal of Electronic Commerce Research. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
    Subject
    Information systems
    Information systems not elsewhere classified
    Marketing
    Publication URI
    http://hdl.handle.net/10072/46864
    Collection
    • Journal articles

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