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Michael Roberts
Byrne Robotics Member
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Joined: 20 April 2004
Location: United States
Posts: 14812

Posted: 23 November 2014 at 11:52am \| IP Logged \| 1

And bidders will give up if they are unable to get higher than the
unknown highest bid. This is no different from knowing what the highest
bid is, except for the bidders having to waste their time guessing.

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This assumes that bidders are behaving rationally, and the point is that
they don't. eBay is fully aware that the more people that bid, the more
likely the final bid will be higher. This is why they encourage their
sellers to start their auctions low, and why they push an auction with a
lot of bidders higher up on the search results.

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John Byrne
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Grumpy Old Guy

Joined: 11 May 2005
Posts: 132234

Posted: 23 November 2014 at 12:00pm \| IP Logged \| 2

-----

This assumes that bidders are behaving rationally, and the point is that they don't. eBay is fully aware that the more people that bid, the more likely the final bid will be higher. This is why they encourage their sellers to start their auctions low, and why they push an auction with a lot of bidders higher up on the search results.

••

All of which has nothing to do with the fact that eBay collects its fees only from the winning bid, whether high or low. eBay may wish to create a feeding frenzy among the bidders, and perhaps sometimes they succeed. But not all the time.

And those bidders who are insane enough to be driven to bid far beyond their means do not represent a high enough percentage of the populace to truly enrich eBay's coffers.

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Michael Roberts
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Joined: 20 April 2004
Location: United States
Posts: 14812

Posted: 23 November 2014 at 12:24pm \| IP Logged \| 3

QUOTE:

All of which has nothing to do with the fact that eBay collects
its fees only from the winning bid, whether high or low.

But their fees are a percentage of the winning bid, so it's in both eBay's
and the sellers' best interest to inflate the winning bid. I'm a frequent
eBay seller, and I see it all the time. If I put something up at a BIN
below the average, it gets ignored, but if I throw up a 99 cent auction,
the final bid will be much higher than my BIN.

QUOTE:

And those bidders who are insane enough to be driven to bid
far beyond their means do not represent a high enough percentage of
the populace to truly enrich eBay's coffers.

I post on action figure boards, and frequently someone will argue that
some out of production action figure needs to be reissued because it is
going for insane amounts of money on eBay, and the toy companies
are stupid for not doing so as they would be "printing money". My
counterpoint is that those eBay prices represent what one or two
people are willing to pay for it and does not represent overall demand
for the figure and would not justify a second production run.

You don't need a high percentage of the population to bid irrationally,
just a handful of people with more money than sense. If Black Friday
lines are any indication, there are more than a handful.

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Brian J Nelson
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Joined: 26 August 2014
Location: United States
Posts: 365

Posted: 23 November 2014 at 12:34pm \| IP Logged \| 4

"And bidders will give up if they are unable to get higher than the unknown highest bid. This is no different from knowing what the highest bid is, except for the bidders having to waste their time guessing."

Its completely different. If bidders don't guess, then the lowest adjusted bid does not rise. If the lowest adjusted bid does not rise, then sellers and eBay make less money.

"eBAY ONLY COLLECTS ITS FEES ON THE WINNING BIDS."

THE MORE PEOPLE THAT BID, THE HIGHER THE WINNING BID, THEREFORE THE MORE MONEY THAT eBAY MAKES

The variable comes from creating an unknown high bid. eBay collects on the adjusted low bid, not the potential high bid. If you make the highest bid known, you have less bidders, the adjust low bid stays low, and, therefore, eBay make less money. Its pretty straightforward.

If you were bidding in a live auction in person, you don't know where your competition is willing to stop.

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Brad Krawchuk
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Joined: 19 June 2006
Location: Canada
Posts: 5819

Posted: 23 November 2014 at 1:25pm \| IP Logged \| 5

JB -

Person X bids $500 on an item. eBay makes this known, and no one else bids because no one else is willing to pay $500. The item sells for $.05, which is the lowest increment the price for the item can be raised.

Person X bids $500 on another item. eBay doesn't make this known, and twelve other people bid $20, $22, $51, $75 and up to $100. The first person, who originally bid $500, pays $100.05, the first increment over his nearest competitor.

That's pretty much how eBay works on auction-style listings. There's an increment (it can be as low as a penny, I once paid $1.04 for a GIJOE figure including $1.03 for shipping) and the price of the item only increases to the first increment past the second highest bid, if there is more than one bidder, or to the first increment period if there is only one bidder.

Edited by Brad Krawchuk on 23 November 2014 at 1:26pm

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