I thought I understood Dutch Auctions!

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posted Sep 17, 11:48 PM
hi guys, i'm familiar with how a dutch auction works (i.e. multiple number of items offered, everyone bids, if there are more bids than itmes offered then only the highest bidders win the items but every winner pays the same price no matter how high his bid was, the winning price is the lowest accepted price out of all of the winning bidders) . . . but my question is: does sniping into the winning group in a dutch auction have different elements of strategy? has anyone thought through sniping and dutch auctions before? are there any issues extra important in a dutch auction that i might want to consider? thanks in advance for your input . . . by the way, i have plenty of time because the dutch auction i'm watching doesn't end until next wednesday . . . ciao, steve



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Posts: 22 | Registered: September 03, 2004



Puppy Raiser
Sniper Hall Of Fame


posted Sep 18, 9:09 AM
You know the bid history display has changed in dutch auctions, right? Actual amounts of (edit) WINNING (end edit) bids are no longer shown, only the current price. BUT... the winners are still in bid amount order, highest on top.

Yes, I've thought about it.

If you only want one, it should be easy to figure because you can see the lowest winning bid. Your snipe should be one increment higher plus a few cents buffer incase of another minimum bid comming in.

If you want more than one, it's a little more complicated, but still possible. You should nibble your way up the list bidding for a quantity of one. (bids are still listed in amount order even though only the current price is shown) Do this 30 minutes or so before auction end. When you get high enough in the list to have the number of items you want below you, including your current bid, stop. Near auction end, check to make sure you have not moved down in the list, and snipe your current bid for the quantity you want.

Does that make sense? Does that sound right?

This message has been edited. Last edited by: Puppy Raiser, Sep 18, 4:19 PM
Posts: 3038 | Registered: November 14, 2003



psalmone
Sniper In Training


posted Sep 18, 2:50 PM
hmmm, hiya pup, methinks you made it sound a little more complicated than my understanding of it (i'm really just a simple guy) . . . but then i'm just working on my first cup o java this morning . . . at the end of the day, no matter how HIGH i bid, as long as i'm in the winning group, my actual cost should only be one (1) increment above the highest losing bidder, right?

for example, let's say that there are five items available in this dutch auction and there are twenty bidders bidding for forty of these items (some bidders want two or three of these items, etc.) . . . okay, still with me? . . . if i snipe with a takeout off-the-wall bid at the end of the auction, my actual cost would be the lowest price (the exact same price) that each winner pays . . . and according to my limited understanding that price would be one increment above the highest losing bid . . . right?

let's say in my example that my off-the-wall bid of $200 puts me into the winning group, and by my bid the previously no. 5 guy (yes, i know it is bit items and not bidders when some bidders want multiple items) drops out of the picture as the now no. 6 guy, but his highest bid is only $50 . . . . okay, so the winning price for each of the items for each of the winning dutch auction bidders is $51, right?

if i'm wrong somewhere in this analysis, please point it out to me . . . thanks, steve



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Posts: 22 | Registered: September 03, 2004



Puppy Raiser
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posted Sep 18, 3:45 PM
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price would be one increment above the highest losing bid . . . right?

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No... Your price would be the lowest winning bid. There COULD be quite a differance between the highest loser and the lowest winner, but then again they could be the same amount too.

Clear as mud?
Posts: 3038 | Registered: November 14, 2003



psalmone
Sniper In Training


posted Sep 18, 6:54 PM
uh huh . . . same hypothetical as i presented before (i.e.only 5 items available in dutch auction with lots of bidders, including some multiple bidders): Mr. A bids for 1 at $95; Mr. B. bids for 2 at $70 each; Mr. C. bids for 1 at $65; Mr. D bids for 1 at $50; Mr. E bids for 1 at $45; etc. If the auction ends now Messrs. A, B, C and D each get what they want (Mr. E loses out because all 5 items were taken before it gets as low as his $45 bid), but every winner pays $50 (because Mr. D's bid up to $50 was the lowest winning bid, and not $46 which would have been the next increment above Mr. E's bid) for each item they have won.

Let's say I come a-sniping and I bid $200, then Mr. D gets knocked out because he would be in line for the 6th item and there are only 5. And the price jumps to $65 because that is the maximum amount that the NEW lowest bidder is williing to pay. . . . hmmm . . . thanks, pup, this helps because I was thinking that it would only be marginally above the losing bid as in a typical ebay auction.

this IS interesting . . . so here without knowing who else is bidding what amount; it really is beneficial to creep incrementally.

steve



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Posts: 22 | Registered: September 03, 2004



psalmone
Sniper In Training


posted Sep 18, 7:25 PM
okay, now a different hypothetical . . . let's say that there are 20 items available in a single dutch auction; minimum acceptable bid is $1.00; if Mr. A wants 5 of them and he wants to be pretty sure that he's them so he bids $40 for each of the 5 items, but if no one else has bid yet and there are still 15 available at the minimum acceptable bid price, then ebay would show Mr. A's bid at $1.00, correct?

Now as time passes by and others join into the fray, let's say that the next highest bidder, bids for 18 at a price of $5.00 . . . then it would show Mr. A's bid at $5.00 also (because it would not display Mr. A's ultimate bid if he might still win it at a lower price) right? In this situation, does it show Mr. B as only partially winning or just as another winner and Mr. B finds out later that it is only a partial win?

Okay, moving on, if Mr. C comes in and bids for 1 at $50, then it shows Messrs. A, B and C as all bidding $5, but if it ended then and there Mr. C would get his 1, Mr. A would get his 5 and Mr. B would get only 14 out of the 18 Mr. B wanted, right?

Still same example, because Mr. B doesn't win his entire order, Mr. B can reject a partial order. If Mr. B does reject the partial order, do the folks who bid an amount below Mr. B's price have an opportunity to still buy? Or does the seller have the right to kick in a few more widgets at the price selected by Mr. B to sell Mr. B the entire eighteen (18) items that Mr. B wanted?

an inquiring mind would like to know . . . steve



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Posts: 22 | Registered: September 03, 2004



Puppy Raiser
Sniper Hall Of Fame


posted Sep 18, 7:34 PM
Yes, you've got it.
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it really is beneficial to creep incrementally.
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Yes again, for quantities more than one.

Using your example, the bid history would look like this.

Mr.A 50 1
Mr.B 50 2
Mr.C 50 1
Mr.D 50 1
Mr.E 45 1

If I wanted one item, I could bid $51 (51 is the minimum bid) We know MrD is the lowest bidder and his max is $50. The price for everyone would be 51. unless another bid gets placed. If you bid 200, everybody would pay 65.

Now... If I wanted 2 items I would bid incrementally up until I was listed in the bid history Just above Mr.C. If I wanted 3 or 4, I would have to bid up till I was above Mr.B.
Posts: 3038 | Registered: November 14, 2003



Puppy Raiser
Sniper Hall Of Fame


posted Sep 18, 7:49 PM
okay, now a different hypothetical . . . let's say that there are 20 items available in a single dutch auction; minimum acceptable bid is $1.00; if Mr. A wants 5 of them and he wants to be pretty sure that he's them so he bids $40 for each of the 5 items, but if no one else has bid yet and there are still 15 available at the minimum acceptable bid price, then ebay would show Mr. A's bid at $1.00, correct? Correct

Now as time passes by and others join into the fray, let's say that the next highest bidder, bids for 18 at a price of $5.00 . . . then it would show Mr. A's bid at $5.00 also (because it would not display Mr. A's ultimate bid if he might still win it at a lower price) right? Yes, correct In this situation, does it show Mr. B as only partially winning or just as another winner and Mr. B finds out later that it is only a partial win? He knows right away. Quantity bid for and quantity won are both displayed.

Okay, moving on, if Mr. C comes in and bids for 1 at $50, then it shows Messrs. A, B and C as all bidding $5, but if it ended then and there Mr. C would get his 1, Mr. A would get his 5 and Mr. B would get only 14 out of the 18 Mr. B wanted, right? Correct

Still same example, because Mr. B doesn't win his entire order, Mr. B can reject a partial order. Correct If Mr. B does reject the partial order, do the folks who bid an amount below Mr. B's price have an opportunity to still buy? No, but the seller could send Second Chance Offers for their bid price. Or does the seller have the right to kick in a few more widgets at the price selected by Mr. B to sell Mr. B the entire eighteen (18) items that Mr. B wanted? No again... well I suppose he could make the offer, but it would be an 'Off eBay' sale.

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