So, the question is, when is sniping worth the risk of not getting your bid in? There are lots of reasons it might be.
(There is sniping software to address this latter problem, but when we surveyed eBay users we didn't find that it was being widely used.) On Amazon, sniping is much less effective, since the automatic extension rule means that other bidders always have 10 minutes to respond.Īnd sniping is not without cost: Planning to make a late bid may mean that you fail to make a bid, either because the auction closes before your bid gets through (when you're trying to make a very late bid), or because something comes up that prevents you from getting around to making a bid. By bidding at the last minute, they don't give others who might want to change their bids in response the time to do so. Only 11 percent of the auctions in our data had to be extended because a bid was made in the last 10 minutes of regularly scheduled time.Ī: On eBay, people snipe to avoid price wars. There was much less late bidding on Amazon. Antiques were more heavily sniped than computers, but there was lots of sniping for computers too. Q: In your study of eBay, how much sniping was going on, and what categories or products were most likely to be sniped?Ī: In the eBay data we collected for our 2002 American Economics Review paper, "Last Minute Bidding," 55 percent of the auctions have bids in the last 10 minutes, 37 percent in the last minute, and 12 percent in the last 10 seconds. Amazon auctions also have a scheduled end time, but the auction is extended if there are bids near the scheduled end the rule is that the auction can't end until at least 10 minutes have passed without a bid. EBay auctions have a firm deadline: When the scheduled end time of the auction is reached, the auction is over. And, at the time we compared them, those auctions had only one important difference in their rules: They had different rules about how an auction ends.
When colleague Axel Ockenfels and I started to look into this, we noticed that there was much less late bidding in Amazon auctions than in eBay auctions. So, when I noticed, back in the early days of eBay, that a lot of auctions received bids right near the end of the auction (eBay participants call this "sniping"), I wanted to know why. Sara Grant: What attracted you to study late-bidding behavior on eBay and Amazon? Were there any surprises from what you originally anticipated might be the results?Īlvin Roth: My colleagues and I who work in market design are interested in how the rules by which markets are organized influence the behavior of participants. One lesson for managers: What happens at the start of a bidding process is not always indicative of how it will end up. On, for example, where end-of-auction deadlines can be extended, snipers are out of luck.
His study of bidding practices on eBay suggest that those who wait until the last minute to bid-a practice called sniping-is an effective way to not only get what you want, but to keep the final price lower.īut sniping isn't a universal strategy for success, says Roth, who teaches in the School's Negotiation, Organizations & Markets unit.
Beware of competitors lying in the grass, says Harvard Business School professor Alvin E.