Dutch auctions are problematic for snipers. We've had someone spell out his strategy for them fairly recently, as a matter of fact, and it didn't include any snipes. Yes, here 'tis; this was posted by RhinoBoy on June 12, 2003:
"I don't usually snipe dutch auctions because the timing of the bid is so important. Dutch auctions are more like those who get in line first win. The people who bid early get to place lower bids because of the bid increment requirements.
"Here is what I mean:
* There are 10 items for sale.
* Current bid is 1.00
* I figure the value of the product to me is 10.00
* I want 6
* There currently are 8 bids for 1.00 each.
* I bid 10.01 for 6
"Now why would I do that? Everyone keeps bidding at the lower level with the bid increment increasing at minimum increment. Now two things can happen:
* Bidding stops way lower than my 10.01. This is great for me because I get all 6 for the winning lowest bid. If the lowest bid is $2.00, I get 6 for 2.00 each. I have the highest bid so I get my 6 even if the 2.00 bidder wanted all 10.
* Bidding gets to the 10.00 range. I have an advantage because my bid was at that range 1st. If someone else bids 10.01 and wants all 10, I still get my 6 because I bid first. The other advantage is the bid increment thing. One time I didn’t bid early and the bid increment stopped me from bidding. Say in this case, the next available bid would be 11.00 and it wasn’t worth it to me. Everyone got theirs for 10.00 and I would have been one of them if I had bid earlier.
Rick, do you have a take on this? Could the fact that big Steve is talking about a dutch auction have made a difference?
