> I think some math needs to be done on what the optimal auction structure is given participants arrive and leave at random times.
EBay implements a second place auction which works well given that all participants may not be present at the same time. It counter-intuitive but it has been shown that a second place auction generates the same revenue as a first place auction, partly because participants compensate for only paying the second highest bid. Indeed, the second place auction system can sometimes cause a bidding fenzy, which leads to auction addiction.
However, a simple application of game theory is to minimise information the is revealed unnecessarily. Therefore, if you treat the auction as a sealed bid auction and snipe in the last minute then you save money.
However, the main problem with EBay is the glut of uncontested auctions. I ran a survey on auctions using a script and I found that less than 1/3 of auctions received any bids at all. Much fewer received two or more bids.
Comments
> I think some math needs to be done on what the optimal auction structure is given participants arrive and leave at random times.
EBay implements a second place auction which works well given that all participants may not be present at the same time. It counter-intuitive but it has been shown that a second place auction generates the same revenue as a first place auction, partly because participants compensate for only paying the second highest bid. Indeed, the second place auction system can sometimes cause a bidding fenzy, which leads to auction addiction.
However, a simple application of game theory is to minimise information the is revealed unnecessarily. Therefore, if you treat the auction as a sealed bid auction and snipe in the last minute then you save money.
However, the main problem with EBay is the glut of uncontested auctions. I ran a survey on auctions using a script and I found that less than 1/3 of auctions received any bids at all. Much fewer received two or more bids.