Hi all,
I find this topic fascinating. Ebay will never implement a snipe feature for the exact same reason that I ALWAYS snipe auctions--the final purchase price is consistently much lower. Ebay charges sellers a listing fee as well as a percentage of the final purchase price, so their profits drop right along with the final price.
To illustrate why the final purchase price is lower, you have to consider the ways people bid, which I learned after much experience. The first situation is obvious: The final purchase price is often driven up by bidding wars, by which I mean I bid $5, Joe bids $6, I come back and bid $7, Joe bids $8, and we trade bids back and forth like that. Sniping would help you win in this situation because it does not give the other person a chance to come back and outbid you.
BUT--another very common situation is the serial bidder. Say I bid $20 for an item that starts at $5. Joe comes along and bids $6. I still have the high bid, so he bids $7. He keeps bidding this way, increasing his bid a little at a time, until he discovers my maximum bid of $20 (I guess he does this because he doesn't want to pay a penny more for the item than he has to--he wants to know exactly what my highest bid was, and bid just enough to be in the high position). I could come back and outbid him, because I know he is probably only one increment over me, but I have now paid over $20 for the item, much more than I probably had to. If you are ever in an auction where you see 8 or 9 bids, but only two bidders, chances are this is exactly what happened. Now to look at this situation with a snipe on my part: I place my snipe of $20, Joe comes in and bids $5, the opening bid, and is happy because he is the high bidder, so he doesn't bid again. I come in at the last second with my bid, and I win the auction for $5.25 or $5.50 or whatever (I can't remember the bid increments right now). THIS, to me is the real benefit of sniping--I have seen this happen again and again, and it was driving me crazy.
After years of bidding, I know that this is the case--that sniping helps me win auctions for a much lower price--and I thought that was pretty much the benefit of sniping. But the whole discussion makes me wonder, why else would anyone snipe an auction? Just for the thrill of bidding at the last second?
Angus