Sniping at eBay
Table of Contents
1. Introduction. 2
2. eBay. 3
3. Bidding strategies on eBay. 3
3.1 Sniping and squatting. 3
3.2 Advantages and disadvantages of sniping and squatting. 4
4. Reasons for placing a late bid. 5
5. Game Theory and online auction behaviour. 6
6. Conclusion. 7
7. References. 8
8. List of figures. 9
1. Introduction.
People have bought many of their products via very popular online auction sites like eBay
since they had general access to the internet. Online auctions have a lot of similarities to
classic auctions, there is a seller of a product and there are many buyers who have to bid it.
Finally, the one with the highest bid is the winner and becomes the owner of the product.
Internet auctions give people, in contrast to classic auctions, the opportunity to sell their
products to people all over the world and offer the buyers a whole range of different
products. These auctions, where a consumer sells a product online to another consumer is
called Consumer-to-Consumer (C2C) electronic commerce. Because of a possible
worldwide consumer clientele, the online auctions are very attractive for businesses, so
they started to sell their products via internet as well, this is called the
Business-to-Consumer (B2C) commerce. There are many sorts of auctions, where eBay is
an example of an English auction. An English auction starts with a low price and it
becomes higher when a bidder submits a higher bid. The auction closes after a specific
time or when nobody wants to place a higher bid. Because there are many online auction
sites with different rules, buyers must have different strategies to become the winner of an
auction. One of these strategies is sniping, a popular strategy on eBay, where a bidder
places a bid in the last minute or even in the last second of the auction. This paper shows
why many bidders are using this strategy on eBay and it examines whether sniping is the
best strategy for winning an auction.
Firstly, this paper describes how bidding on eBay works. Secondly, it explains two popular
bidding strategies and their advantages and disadvantages. Thirdly it explains reasons for
placing a late bid and finally it shows the relation between online auction behaviour and
Game Theory.
2. eBay.
eBay, one of the most popular online auction sites, has its own bidding rules in which
some of them differ with other auction sites. There are two options for buying something
