http://techdirt.com/articles/20070718/070335.shtml - Surprise: Auction Bidders Not Always Rational

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In an attempt to gain a better understanding of human economic behavior, a group of economists studied the buying patterns of eBay auctions. What they found was that humans are not always rational, at least in the econ 101 sense of the word. One of their most surprising realizations was that bidders would often pay a higher price than the "Buy it Now" price, presumably because they got so caught up in the heat of the auction. This is an odd quirk, though its discovery was hardly needed to demonstrate that humans don't always operate in a purely rational manner. Another thing they discovered was that bidders didn't pay much attention to shipping prices, and that they'll typically opt for an item that can be won for less, even when shipping costs eat up any savings.
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I guess I am half rational. I always look at shipping, but I'll pay more for buy it now simply because I don't like auction watching.

Economics theory is pure gibberish anyway, so that we don't match it shouldn't be a big surprise.

"I'll pay more for buy it now simply because I don't like auction watching."

That's not irrational.  That's like looking at something in a store and deciding it's a fair price, ok, I'll pay it.  What's irrational is if you pay MORE than the buy it now price because it was bid up.  Presumably if you were willing to pay that much, you would have just bought it rather than bidding on it.

>What's irrational is if you pay MORE than the buy it now price because it was bid up.

I haven't used ebay in a long time, but doesn't the "Buy It Now" disappear after {X} bids?

To me what would make sense would be to bid the highest price you're actually willing to pay.  If anybody bids higher than you then you leave it, if nobody does, you get it for slightly higher than the next highest bid (that's how the automatic bidding works, right?)  So in a perfectly logical world, you wouldn't have bidding wars because everyone would just put in their max acceptable price and the highest would get the item.  I haven't used eBay on an auction myself so you can take my opinions with the appropriate grain of salt.

I use Buy It Now.  It makes perfect sense to use that when the price and value are worth it to you.  So you buy a table saw for 70% of the price in the store with Buy It Now.  Sure, MAYBE you could have gotten it for less by playing the auction game.  But why bother when there are SNIPERS out there stealing auctions at the very last millisecond?

The sniping ruins any auction for a popular item.

Sniping doesn't ruin ANYTHING as long as you put in your REAL maximum bid.  In other words, if you're willing to pay $75 for something, you're probably willing to pay $77.50.

If you put in your absolute ceiling for a max bid, and somebody outbids it, even at the last second, what have you lost?  You didn't want to pay more than that anyway, right?

On more than one occasion I've listed a used consumer electronic on ebay (something I bought, didn't like, immediately put up for auction) and it got bid up higher than the MSRP price I paid at the store.

Two explanations.  a) I stumbled unwittingly into an arbitrage exchange, or b) bidders are morons.

Or maybe c) my description sold the item better than the canned product specifications do.

But muppet--they snipe you by something like a penny.  I don't see how sniping is fair.

or whatever the minimum is.

The minimum increases as the price increases.  If they outbid you by a penny and you're mad about it, then you didn't put in your REAL maximum bid.  Sniping is irrelevant as long as you actually put the REAL ceiling you're willing to pay in.

Fuck all that.  Just click Buy Now.  Can't be playing these games.  Shopping isn't a hobby for me.

I use buy now a lot, but I also am honest about my maximum willingness to pay.

Shopping is not a hobby?  On Ebay?  That's sad.

Okay we depart company on that point.  I don't enjoy giving money away for "things".

What I mean is that if you consider Ebay a valid resource for mission critical acquisitions, that's the wrong way to look at Ebay.

Oh.  Well, I tend to "want what I want and I want it now" so eBay isn't really the best thing for me.