The Psychology of Bidding.......

[Leon]

I was on my way to lunch today and was thinking about the Goudey Ruth I just won in auction. And I was thinking how freaking crazy we collectors are. I called the auction company twice to make sure that the tiniest of white print dots isn't on the card, which shows on his cap in the scan. I was willing to overlook the dark cream, softened corners, but if that needle head sized dot were actually there I probably wouldn't have bid (that high of a price). We are a crazy bunch when it comes to our collecting.... :) I don't have it in hand but here it is again.....

http://luckeycards.com/pr319ruth.jpeg

[MattyC]

Leon,

With centering like that, if you get it and don't like it I will happily work out a deal on it from ya.

Matt

[bobbyw8469]

Nice card Leon....just looks like trash in the scanner to me.

[Republicaninmass]

I'd drive to REA to look at some of the lots!

[CW]

Prior to two years ago, 90% of my card purchases were through eBay, with the other 10% being from private deals. Now that I've been dabbling a bit with online auction houses (eg. REA, Love of the Game), it's been interesting to see the differences in bidding psychology between a fixed time ending format like eBay, and a live auction format like we see from AH sites.

With eBay, it's all about the snipe. You bring your best bid, input it to register a few seconds before ending time, cross your fingers, and pray you win the card (but hope you're not overpaying).

With auction houses and the extended bidding format, I can see how things can get more competitive. Sometimes it's best to place a high bid very early, to occupy that top bidding slot which would force the next bid increment to overpay. Other times it might be better to wait until 4am to get in that last bid while some other poor sucker is drooling on his keyboard because he couldn't stay awake. :)

The bid increments with auction house auctions also play a big role compared to eBay auctions. The smaller bid increments on eBay allow you to fine tune a bid, sometimes down to the penny. With auction houses, however, once bidding on an item gets up into the higher levels, the larger bid increments can cause an item's price to increase significantly with each bid (plus BP).

With eBay, once an item has ended, that's it -- you either won or lost. But with the auction house format of extended bidding, all it takes is one more bid within that 15 minute time frame, and the item could still be yours. The auction isn't over until you say it's over, and sometimes that can be a dangerous (and costly) thing.

[Leon]

Nice synopsis Chuck. And you are correct of course. When I take a place at my final bid on a card it is where I want to be and I usually won't go over it...unless I know I won't see it again, or for a long time. This Ruth card, at the spot I was at, is about 15%-20% over what nice ones sell for...so I was fine with that as long as that print dot wasn't there :). But that was also my last bid increment. With such common cards there is quite a bit of comparative market analysis.....and I was willing to pay a record price (or almost record) for the right card, as we have so often seen on the board. Had this card been on ebay I probably would have been in the same area on it but wouldn't have had the chance to re-bid, regardless of my mindset, as I almost always snipe too. AH's can be dangerous places to collect. :) And yes, MattyC, I did think about your recent Mick purchase too.... I guess we both have similar views, though mine was on a much smaller scale on this one.

[ls7plus]

Leon,

With centering like that, if you get it and don't like it I will happily work out a deal on it from ya.

Matt

+1. Yeah, it reminds me of the 1935 Diamond Stars "Greenburg" error I purchased from Steve Verkman (excellent seller, by the way) last year--near perfect centering, with slightly whiter borders than Leon's Ruth, and an ink mark on the back that would probably come out if soaked by someone on the board who knows what they are doing. A bit less corner wear than this Goudey Babe. I had previously sold the same Greenberg error version in ExMt several years ago to help pay off some credit cards, and I like the eye appeal of my present one just as well!

Great collecting to all,

Larry

[GregMitch34]

My "psychology" is buying only cards with perfect or at least great centering. In my mind--part true, part fantasy--that makes every card I get at a fair or market price ACTUALLY a nice bargain since I figure (hope) that it's at least 10-20% more valuable than the average price for the card due to centering. This often proves true, which only encourages me...

Wonder if you folks agree...

[mrvster]

I could see where that "dot" would be a distraction, but a beauty of a card:eek:
especially when condition will outweigh any rarity....
I have the 181 classic pose....in good cond.....:)

CONGRATS!

Chuck, you just explained that perfectly:)

[I Only Smoke 4 the Cards]

My approach is to put in my highest bid and walk away. If I win great and if not then oh well.

I have never set a snipe. How does it work?

[Leon]

My approach is to put in my highest bid and walk away. If I win great and if not then oh well.

I have never set a snipe. How does it work?

You place an early, automatic, private bid that will bid for you within seconds of the auction ending. Basically it's your approach, you bid early and forget about it :).....

[conor912]

I was on my way to lunch today and was thinking about the Goudey Ruth I just won in auction. And I was thinking how freaking crazy we collectors are. I called the auction company twice to make sure that the tiniest of white print dots isn't on the card, which shows on his cap in the scan. I was willing to overlook the dark cream, softened corners, but if that needle head sized dot were actually there I probably wouldn't have bid (that high of a price). We are a crazy bunch when it comes to our collecting.... :) I don't have it in hand but here it is again.....

http://luckeycards.com/pr319ruth.jpeg

Nice card. I was the underbidder to complete my set. Glad it went to a board member. Enjoy.

[Leon]

Nice card. I was the underbidder to complete my set. Glad it went to a board member. Enjoy.

Ugh, sorry 'bout that. Ya' almost never know when you are bidding, who you are bidding against.

[conor912]

Ugh, sorry 'bout that. Ya' almost never know when you are bidding, who you are bidding against.

It happens....nature of the game. I went back and forth on that next bid for days. I'll be kicking myself for a while on that one.

[Stonepony]

Any thoughts on bidding incements in the larger auctions? Specifically the 10% increment rule. I wonder at times if this hurts the consignor and final gavel price. For instance in Goodwins last auction an item went to "X" amount and closed there. I was willing to up the bid a couple hundred dollars but the 10% required increment ( plus the 20% buyers premium) was more than I wanted to go. If I had been allowed to up the bid at a lower increment its possible the eventual buyer would have outbid me again. Either way- consignor and aution house lost out on $ because 10% was too big a jump for me personally. Is there data showing that higher increments of bidding = higher gavel prices?

[MattyC]

My "psychology" is buying only cards with perfect or at least great centering. In my mind--part true, part fantasy--that makes every card I get at a fair or market price ACTUALLY a nice bargain since I figure (hope) that it's at least 10-20% more valuable than the average price for the card due to centering. This often proves true, which only encourages me...

Wonder if you folks agree...

Greg, I think you and Leon have nailed it in your posts here. People love to look at the "average" price on VCP, but that is just what it is-- the average. It is not at all what the very best card in its grade will go for.

I think far too many collectors get hung up on "overpaying" based on the "average," as if that average is the real market price. And that is a gross misinterpretation of what that VCP average really is. Staring at that average and fear of overpaying will only lead one to miss out on and lose the very elite cards for any given grade.

If one really wants a card that blows away others in its grade, and even those with bigger sticker numbers, one has to be prepared to pay a premium over the VCP average. If I know how rare a card is to find centered or without some usual endemic flaw, and I see that rare, standout example, then I want it. And I will pay what it takes to get it in my collection. I never, ever see this as overpaying. Not when the alternative is losing out on the top specimen for the grade, or paying a bit less hard-earned money for an inferior example, when I will forever know very well that there's a better one out there. To me, overpaying is actually paying any amount for a lesser card, just to save a couple bucks.

And the proof is in the happiness. I would bet the farm that when it comes to cards like the ones you mention, and the Ruth in this thread is a prime example, there is far more underbidder's remorse than winner's remorse.

But of course the philosophy you mention only makes sense when one does not view all cards in the same grade as identical. There is a real danger in getting hung up on wanting 'Grade X,' as much as there is in getting hung up on the VCP average. That danger can lead to one buying downright ugly cards that, in the future, will never perform or appreciate the way the best looking ones in the grade will.

Leon's Ruth in the initial post here is just such an elite example for the grade. Should he ever want to sell it, he will be able to find many more buyers for this example that has elite centering, as compared to had he paid closer to the VCP average for an ugly example. And I'd bet the proverbial farm that his 4 will appreciate at a greater rate than the usual looking 4.

[GregMitch34]

Good comment. I NEVER consider VCP average--I will look at all sales listed to see fluctuation, and latest, and follow links to see photos if provided. Same at Card Target, which has photos of EVERY card, even the backs, so it's easy to see why prices were higher or lower for each example. That way you can usually see the "premium" your card deserves (and has often gotten). As I wrote, sometimes it's only a small amount--but still very real. And enough to get me to take the plunge on a card I might normally pull back from.

[ullmandds]

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

[h2oya311]

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

I sure hope you and someone else w/ your buying philosophy are bidding on my consignments!!! It's amazing how many graded cards sell for close to VCP, even for rare cards w/ only a few graded specimens.

I use VCP, but always look at the actual sales, photos, and avenue of sale when thinking about a fair price. It can be dangerous though. I once purchased a few t205 from a small AH thinking I got some bargains, but t205 prices realized had recently fallen and I was using 2012 values for some of the rarer ones. I didn't take a bath, but I certainly didn't get any return on my investment. This serves as a constant reminder to me of three things: (1) I am not a dealer, (2) only but cards you want, need, or for which you have expertise, and (3) exercise caution when using VCP, even when used appropriately.

Remember, a card needs only two bidders to realize a certain price...if one of those two guys no longer needs a card or isn't paying attention, the subsequent sale will invariably be much lower than the previous sale...the laws of supply and demand can be a bitch sometimes!!

[steve B]

I sure hope you and someone else w/ your buying philosophy are bidding on my consignments!!! It's amazing how many graded cards sell for close to VCP, even for rare cards w/ only a few graded specimens.

I use VCP, but always look at the actual sales, photos, and avenue of sale when thinking about a fair price. It can be dangerous though. I once purchased a few t205 from a small AH thinking I got some bargains, but t205 prices realized had recently fallen and I was using 2012 values for some of the rarer ones. I didn't take a bath, but I certainly didn't get any return on my investment. This serves as a constant reminder to me of three things: (1) I am not a dealer, (2) only but cards you want, need, or for which you have expertise, and (3) exercise caution when using VCP, even when used appropriately.

Remember, a card needs only two bidders to realize a certain price...if one of those two guys no longer needs a card or isn't paying attention, the subsequent sale will invariably be much lower than the previous sale...the laws of supply and demand can be a bitch sometimes!!

A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon" Meaning that even spending a bit over what's typical for something really nice will usually payoff in the long run. Sure, you'll hardly ever be able to flip it right away, but if it's something you'll keep for a few years you'll do better than the person paying an average price for average stuff, or a low price for items with problems.

I'd have to agree. When I started T206s were about 1.50 for VG commons, Maybe 1.00 for G, maybe 2.00 for EX. Most HOF players were 5-10. Most backs didn't matter at all, I think my Broadleaf that's poor was $5, maybe 10.
The difference now is much bigger. And I think in a few years it will be bigger still.


Bidding in auctions is different for everyone.

For me Ebay stuff gets a few different tactics

For stuff I'm fairly sure on the value of, I snipe. Not with a service, but manually - Mostly because of budget. If I put snipes on all the stuff I want I'd be in trouble very quickly.
If I'm interested in it but not really interested, I usually just bid and see what happens, especially if it's a cheap or really common thing.
Stuff I'm not sure about the value of I usually handle the same way, except I might put in a low bid early to remind me to do some research.

Then there's the stuff I really want or like, or that looks like it might be special in some way. Those get a bit more attention, and I discuss them with my wife who is very good at giving a second opinion or reality check. Then I figure out what's a bid that would have a reasonable chance of winning. Depending on what other items are up I might abandon most of the others to bid more. In one case I went as far as finding some extra funds. (Then after all that work they got ended early :mad: )

I've only bid in a couple auction house auctions, and the experiences haven't been all that great. One had a "computer problem" and couldn't see any of the online bids. And decided to simply continue the auction. Maybe 50 lots, including nearly all the ones I'd bid on. Those went for around 1/3 of my bids. The other "forgot" to ship the cards I won. Then promised a discount on the shipping and never followed through.
I'm not so sure I'd bother again.

In person auctions are much more interesting. And there's way more psychology. Figuring out how competitive the other bidders might be based on how they bid, whether to wait for the opening price to drop a bit or to start the bidding right away.....Harder, but more fun.
Some stuff goes for way more than I'd expect. And some stuff ends up going for a bargain. --- 4 late 80's-early 90's factory sets, sold for $65?! Early 40's Braves warmup jacket in bad condition, but supposedly Ernie Lombardis - $100. At the same auction :confused: The warmup didn't get much attention in preview. probably because it was hung up near the door and everyone probably figured it was one of the workers jackets like I did. I bid on it nearly blind. Based on what I could see from 20-30 ft away. I'd have gone higher, but fortunately the only other bidder dropped out.

Steve B

[MattyC]

This is golden advice:

"A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon" Meaning that even spending a bit over what's typical for something really nice will usually payoff in the long run. Sure, you'll hardly ever be able to flip it right away, but if it's something you'll keep for a few years you'll do better than the person paying an average price for average stuff, or a low price for items with problems."

Could not agree more. For quick flippers, paying premiums for the best looking card in the grade is "overpaying." But for the collector who wants to enjoy a card for years and thus has a long investment horizon, it is the way to go 100% of the time. Not only do you get the pleasure of admiring and owning the better looking card, but you also will do better if you sell it several years down the line for whatever reason.

[Runscott]

I was on my way to lunch today and was thinking about the Goudey Ruth I just won in auction. And I was thinking how freaking crazy we collectors are. I called the auction company twice to make sure that the tiniest of white print dots isn't on the card, which shows on his cap in the scan. I was willing to overlook the dark cream, softened corners, but if that needle head sized dot were actually there I probably wouldn't have bid (that high of a price). We are a crazy bunch when it comes to our collecting.... :) I don't have it in hand but here it is again.....


Leon, you are smart to ask about those mysterious 'dots'. Several years ago I won a NM T206 Matty through an auction house - it had one of those white dots on it, which you and I discussed the next day after the auction ended (it turned out there were 2-3 NM T206's with dots of paper loss). I was discussing the card with another hobby friend, via email that night, and he told me he had called the auction house and they confirmed that the white dot was paper loss. I panicked, as I had won the Matty, but I called the auction house and they immediately removed it from my invoice. It sure sucked, as I got it for about 75% of its value, but I guess that was because I was the only one who did not ask.

Now I always ask.

[CW]

Any thoughts on bidding incements in the larger auctions? Specifically the 10% increment rule. I wonder at times if this hurts the consignor and final gavel price. For instance in Goodwins last auction an item went to "X" amount and closed there. I was willing to up the bid a couple hundred dollars but the 10% required increment ( plus the 20% buyers premium) was more than I wanted to go. If I had been allowed to up the bid at a lower increment its possible the eventual buyer would have outbid me again. Either way- consignor and aution house lost out on $ because 10% was too big a jump for me personally. Is there data showing that higher increments of bidding = higher gavel prices?

I see exactly what you're saying, and I've experienced the same thing (ie. not bidding again because it's such a large jump). I'd imagine that the AHs have found this is the model that yields the best closing prices overall, which is why they all use it.

Sure, you are not willing to go one bid higher, but it's the same bidding system that already got the item's price to such a high level, so it already worked successfully for the AH (and consignor) to some extent.

You can also, as a bidder, use it to your advantage by figuring out that threshold of "how much is too much" for a card, and then placing a bid very early in the auction to occupy that bidding increment. Of course, this does not account for ego, which is why some items sell for insane prices.

Oh yeah, and before i forget... nice Ruth, Leon!

[brianp-beme]

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

Same here (or +1 for plus one types). Sometimes this can cause friction...a few years ago I really ticked off one board member when I offered 1/4 of what he thought his card was worth. Ends up he was closer to the going price at the time. I guess I was just working off of old brain 'fo, which will happen if you have been in the hobby long enough.

Brian

[Runscott]

A dealer I'm friendly with in another hobby once told me " If the item is a good one you can't pay too much, just too soon"

The trick is knowing which affordable items are the "good ones". Everyone knows the really big ones such as the T206 Plank or Wagner, or the Goudey Lajoie. If you aren't good at making such determinations for lower-priced cards, you better stick to studying market values.

[glchen]

...
Leon's Ruth in the initial post here is just such an elite example for the grade. Should he ever want to sell it, he will be able to find many more buyers for this example that has elite centering, as compared to had he paid closer to the VCP average for an ugly example. And I'd bet the proverbial farm that his 4 will appreciate at a greater rate than the usual looking 4.


Hi Matt, I don't know if I fully agree with this at least for cards in grade 4. (Great card, btw, Leon!) Leon's 4 will probably appreciate at a greater rate than a typical 4, but I doubt that it would generally surpass the grade of a typical 5. So there will still be band that it will be locked into. Cards graded Authentic or Poor, are very different, on the other hand, like your M101-5 Ruth. There can be a huge difference in eye appeal among these cards, as cards can have NM visual appeal, but just have a pinhole or slight back damage that drops the cards technical grade to Authentic or Poor. These cards can appreciate far faster than cards graded multiple levels above it.

[brian1961]

Leon,

I'm right with you on the white dot on Babe's hat. When I look at a card, the first thing I hone in on is the player's head area. That dot would upset me. You're not crazy. A print spot as glaring as that throws up a colossal red flag.

It is interesting to note what auction houses and eBay vendors will sincerely answer questions to dissuade concerns from a potential customer, and which act as if they cannot be bothered.

Hope all things turn out well for you. ---Brian Powell

[Leon]

Hi Matt, I don't know if I fully agree with this at least for cards in grade 4. (Great card, btw, Leon!) Leon's 4 will probably appreciate at a greater rate than a typical 4, but I doubt that it would generally surpass the grade of a typical 5. So there will still be band that it will be locked into. Cards graded Authentic or Poor, are very different, on the other hand, like your M101-5 Ruth. There can be a huge difference in eye appeal among these cards, as cards can have NM visual appeal, but just have a pinhole or slight back damage that drops the cards technical grade to Authentic or Poor. These cards can appreciate far faster than cards graded multiple levels above it.

Thanks for the kudo Gary. I have a different opinion. I will absolutely pay more for a card that looks better, in a lower grade, than one that doesn't look as nice in a higher grade. My guess is that it is mostly registry collectors that will pay more for a higher grade than a nicer looking card. Most collectors I see commenting on this board don't share your view (I don't think).....Nice discussion and though I gave my particular example for me I was hoping members would give their view of how/why they bid on a card. Thanks again.....(you and I have a lot of the same thoughts on cards)

[darwinbulldog]

i DON'T KNOW WHAT MOST PEOPLE DO...BUT i BID WHAT i AM COMFORTABLE PAYING FOR A CARD...USUALLY WITHOUT CONSULTING ANY PRICE GUIDES/vcp.

My approach is the same in that I only bid what I'm comfortable paying. However, that's always a function of what other people are paying. I can't imagine, for example, that I'd feel comfortable giving someone $500 for a nice D304 common if no one else ever paid more than a few bucks. I don't see much difference in using VCP versus the price guides versus just tracking sales for a while myself in order to figure out approximately what other people would be likely to pay for the card. They're just slightly different measures of the same construct. Sometimes I'm willing to pay more than that estimate, sometimes less, but I've never just looked at card and said, "I have no idea what anyone else would pay for that -- $1? $1,000,000? -- but I'll bid $325 without trying to estimate what others might pay first."

[bn2cardz]

Any thoughts on bidding incements in the larger auctions? Specifically the 10% increment rule. I wonder at times if this hurts the consignor and final gavel price. For instance in Goodwins last auction an item went to "X" amount and closed there. I was willing to up the bid a couple hundred dollars but the 10% required increment ( plus the 20% buyers premium) was more than I wanted to go. If I had been allowed to up the bid at a lower increment its possible the eventual buyer would have outbid me again. Either way- consignor and aution house lost out on $ because 10% was too big a jump for me personally. Is there data showing that higher increments of bidding = higher gavel prices?

The 10% increases is a huge problem. Another issue is when you are allowed to put in a ceiling bid but it only does every other increment. This happened on an auction recently where I really wanted a card and wanted to put in the bid where it would make the next amount too high... yet the bid I wanted was between two ceiling bid options. I was very frustrated when someone outbid me with that between amount. I knew that was the amount I wanted but couldn't do it. Yet the next bid was way too high due to the increments.

[steve B]

The trick is knowing which affordable items are the "good ones". Everyone knows the really big ones such as the T206 Plank or Wagner, or the Goudey Lajoie. If you aren't good at making such determinations for lower-priced cards, you better stick to studying market values.

In the hobbies that are his primary business -Stamps and coins - there are long established and reasonably accurate price guides, and most of the production totals are known.

Stamps in average condition are readily available for about half the catalog price. I'm no longer sure about coins.

What he was talking about are the things that aren't bargains right now, but will probably be seen as bargains a few years from now.

To use couple examples from cards
Leons Ruth would always have been a bit more than others that would be called the same grade, and a dealer who graded strictly might have called it just VG. (There was some pushback for a time against stuff like VG-EX, some felt there was no middle ground, it was either VG or EX. ) I was given probably 6-7 chances to buy Goudey Ruths. All VG, all around $100. (Sadly for me I never bought one) Leons would have been a bit more even from someone who would just call it a really nice VG. So at the time if I'd bought a card like that for say 125 I'd have "overpaid" The difference now of course is much larger. And it's still worth "overpaying" for since it's very nice for VG-EX.

When I bought my few Carolina Brights backs, I "overpaid" by paying probably 3x what a common was at the time for the commons and the going rate for the Cobb. They were simply poor condition T206s with an interesting back. That's obviously changed a lot.

It's more about paying a bit more for either rarity or condition than finding a bargain.

That's a whole different exercise.
(Like the lucky people who bought Chinese stamps 15+ years ago when they could be had by the boxful for almost nothing. Who knew they'd become more capitalist and like stamps and want their rare stuff back?)

Steve B

[conor912]

Another issue is when you are allowed to put in a ceiling bid but it only does every other increment. This happened on an auction recently where I really wanted a card and wanted to put in the bid where it would make the next amount too high... yet the bid I wanted was between two ceiling bid options. I was very frustrated when someone outbid me with that between amount. I knew that was the amount I wanted but couldn't do it. Yet the next bid was way too high due to the increments.

I just encountered this for the first time last week bidding with REA. I, too, thought it was weird, so I called them and asked why they do that. They said they don't allow the same bidder to hold two consecutive auto-bidding positions to prevent ties and make it more fair for other bidders. I pressed further and asked why a tie wouldn't just go to the first bidder and he said "just so that there's no question" which I thought was a pretty weak answer. When I asked further, he matter-of-factly admitted that the whole reason was just to garner higher bids. Something about the whole situation rubbed me the wrong way.

[DeanH3]

I know I'm a difficult buyer. I'll ask about every possible imperfection that shows on a scan to make sure I know what I'm buying. I'd rather be a pest and have my concerns answered rather than not ask and be disappointed.

Once I'm all in on a card, I'm definitely guilty of paying a premium if it has the "look" I want. One in particular is my red cobby. I looked and waited for years to find one that met my criteria, centered, focused and bold color. Good thing sharp corners were not a criteria. :) When it popped up I went overboard and I have no regrets.

http://i101.photobucket.com/albums/m52/DHack3/BB%20Cards/T206CobbRedPSA35_zpsc61c3450.jpg

[BruceinGa]

What a stunning Cobb!!

[Robert_Lifson]

I just encountered this for the first time last week bidding with REA. I, too, thought it was weird, so I called them and asked why they do that. They said they don't allow the same bidder to hold two consecutive auto-bidding positions to prevent ties and make it more fair for other bidders. I pressed further and asked why a tie wouldn't just go to the first bidder and he said "just so that there's no question" which I thought was a pretty weak answer. When I asked further, he matter-of-factly admitted that the whole reason was just to garner higher bids. Something about the whole situation rubbed me the wrong way.

REA’s bidding system is designed differently than other auctions (but not for the reasons stated in your post). I don’t know who you spoke to but there was definitely a miscommunication. (Of course it was probably that darn Brian Dwyer. He's a loose cannon. Constantly making stuff up).

It is accurate that we have designed our system so that a bidder cannot take two consecutive bidding increments. (I should add the words “on their own” because if for some reason a bidder really wishes to actually top their own bid, which is occasionally requested for some strategic reason, we can communicate this request with our auction software host and they can make this happen, but it is a very rare request.)

Without a special request, a bidder can simply not top their own bid at REA. The software is specially designed to not allow this. The reason is very simple: it is for the protection of the bidders. We don’t want anyone topping their own bids by accident. There are other auction software programs that exist that do not have this safeguard, and in those auctions it is not uncommon for bidders to top their own bids by accident. Most of the time, of course, they don’t realize they have topped their own bids. The REA system is designed (and has always been designed) to not allow this to happen. On your own, it’s impossible for you to top your own bid at REA. If anything, this keeps prices lower than they otherwise would be at REA, as no one is ever topping their own bid by accident. Similarly, at REA we do not allow bidders on their own to place what are often called “straight bids” that can be any number of increments higher than the next bidding increment. To us, placing a “straight bid” much higher than the next increment is simply the equivalent of placing multiple consecutive bids. Our software does not allow bidders to place “straight bids” at higher levels.

One question we sometimes get is why a bidder can’t take two consecutive increments for an UPTO bid. This is a very different issue. The reason we don’t allow bidders to take two consecutive increments as upto bid choices (and I hope I am explaining this clearly) is that to me, this just doesn’t make sense. The whole purpose of an “upto” bid is that if your bid is topped, your upto bid will instantly come in and top that new bid. If bidders are not required to respect the bidding increments, the entire upto bidding system fails. We are well aware that many auctions (maybe most) do not feel the same way, or for some other reason the software they utilize does not address upto bids in the same way as REA. We think those systems are flawed. The flawed software systems (and for clarification, I am the using the word “flawed”. I think the auctions that use it are fine with it; they would not call it “flawed”) allow a bidder to place a bid with an upto bid at any level desired. The “upto” limit has no reference to the bid placed. Because of this, in these auction systems a bidder can use an upto bid to take up two consecutive increments. So “Bidder A” can bid $1,000 on an item with an “upto” of $1,100. If “Bidder B” tops the $1,000 bid with a bid of $1,100, in these flawed systems, “Bidder A” (who was previously high bidder at $1,000) becomes the high bidder at $1,100, and “Bidder B’s” $1,100 bid (which topped “Bidder A’s” $1,000 bid and triggered “Bidder A’s” $1,100 “upto bid”) takes a back seat to “Bidder A’s” $1,100 “up-to” bid. Even though both bidders have $1,100 bid limits (an occurrence that does not happen at REA as the REA system does not allow this), Bidder A’s “upto” bid takes precedence and has priority. To me, this is not fair, and we would never allow this.

For greater clarity, the best way to explain this (as I know it is a little confusing) may be the following: At REA, the system is designed to treat the increments and the bidding process similar to that of a live auction (though in “slow motion” over a period of weeks). Imagine an auctioneer asking the audience for the minimum bid of $1,000. At REA, when a bidder places a bid of $1,000 with an upto bid, the menu of upto bids available is unique to that bidder. Everyone else sees a different menu of bidding increments. (Think “odd” and “even”). So when a competing bidder bids $1,100 at REA, no one can take that $1,100 slot away from them. They are high bid at $1,100. If the $1,000 bidder had an upto bid of $1,200 (or $1,400, or $1,600 etc), the system will instantly top the $1,100 bid with a bid of $1,200. Under no circumstances does the $1,000 bidder get to bully the $1,100 bidder and take the $1,100 spot also. They can bid higher ($1,200) or not, but the new bidder has the $1,100 spot. Otherwise, to give the live auction analogy, it would be like Bidder A at $1,000 was hoping the auctioneer was about hammer the lot down at $1,000 (“going once, going twice…”) and competing bidder B raises his hand to bid $1,100, and then Bidder A elbows Bidder B, knocks him out, and announces loudly to the room “Don’t listen to him. His bid does not count! It is I that is bidding $1,100”. Even though it was his bid at $1,000 that Bidder B topped with a bid of $1,100. That wouldn’t be fair at a live auction. And it wouldn’t be fair at REA. That’s why we have our auction bidding increments set up the way they are.

I wrote this up very quickly and I realize I may have not covered all the nuances of our system (there are many) and the philosophies behind why we have designed our bidding systems the way we have. There’s no one “right” bidding system. But a tremendous amount of time and thought (and investment - we had to pay for all of our desired software customizations) has gone into the design of our systems; and the philosophy that ruled all decisions was always dictated by what I thought was fairest to all bidders, what provided protections to individual bidders, as well as to all other bidders, and to the integrity of the bidding process. I have studied how other auction systems work (at other auctions I’ve even accidently topped my own bids, and have had my own bids “bumped” aside by “upto” bids left by the very bidders I topped; I have even had other bidders win item at the same level I bid). I like REA’s system best for bidders by far. We would always consider making changes if we thought they were improvements, but our bidding system with reference to increments and upto bids works exactly as we desire it to.

One final note: If the menu of upto bidding increments does not offer the desired level a bidder wishes to land on, there are ways to address this (this can be remedied by just waiting until the next bid comes in to jump in). If you want to place an bid of $1,000 upto $1,300, this is not possible at REA because $1,300 is not an “upto” increment for a bidder at $1,000. The $1,000 bidder can choose from a menu of upto bids that includes $1,200; $1,400; $1600; etc. If the bidder really wants his upto bid to have the right to potentially land on $1,300 (and the $1200 and $1400 increments are just not OK), then the bidder would have to let someone else bid $1,000. And THEN they could come in with a bid of $1,100 with an upto bid of $1,300.

Sorry this is so brief! (the scary part is this just scratches the surface! But I thought I'd post this in case it was helpful or informative to anyone).

Sincerely,

Robert Lifson

Robert Edward Auctions LLC

www.RobertEdwardAuctions.com

[conor912]

Rob,
The time and effort that went into writing this does not go un-noticed. Thank you.

[MattyC]

I also appreciate the time and effort that went into that response. Yet as a bidder, I see it somewhat differently and would take the counterpoint...

If "Bidder A" makes an $1100 max bid and is currently leading at $1000, he still claimed that $1100 slot first. He was the first person to stake out and claim that max, that slot. He was the first to pledge his money at that level. Therefore, he should be rewarded for that-- and the reward comes in the form of winning in a tie situation. The tie should favor the man who stepped up first. So when "Bidder B" comes in at $1100, "Bidder A"' should still now lead at $1100, as his max gets triggered.

Same scenario should happen if "Bidder A" makes a bid of $1000 and is leading. Then he decides he's willing to pay more, and subsequently ups his max to $1100. He still was the first one to be willing to pony up $1100, so his bid should take precedence over any later comer. "Bidder A" isn't "bullying" other bidders; he stepped up first with his money.

[Stonepony]

I also appreciate the time and effort that went into that response. Yet as a bidder, I see it somewhat differently and would take the counterpoint...

If "Bidder A" makes an $1100 max bid and is currently leading at $1000, he still claimed that $1100 slot first. He was the first person to stake out and claim that max, that slot. He was the first to pledge his money at that level. Therefore, he should be rewarded for that-- and the reward comes in the form of winning in a tie situation. The tie should favor the man who stepped up first. So when "Bidder B" comes in at $1100, "Bidder A"' should still now lead at $1100, as his max gets triggered.

Same scenario should happen if "Bidder A" makes a bid of $1000 and is leading. Then he decides he's willing to pay more, and subsequently ups his max to $1100. He still was the first one to be willing to pony up $1100, so his bid should take precedence over any later comer. "Bidder A" isn't "bullying" other bidders; he stepped up first with his money.

1+

[barrysloate]

Since I ran auctions for many years, let me respond to a few of the issues brought up here.

First, I know some bidders feel a 10% increment is too high, and would prefer to be able to raise a bid 2% or 5%, more like we can do on ebay. What they fail to realize is it makes it just as easy for that other bidder to top you. So you may not like to raise a bid 10%, but it might just be enough to knock out the competition and win you the lot. If you could raise it 2%, the next guy would have no trouble topping you also.

And with regard to alternate increments only on ceiling bids, I agree completely with REA's system. As an auctioneer, you never want to have a situation where two bidders are tied at the same bid. You especially don't want to have a tie for the winning bid. Here's why: only one of them can win the lot. When you tell the winning bidder he won, he always thanks you and tells you what a fair system it is. And then, when you tell the other guy he lost, he screams and yells and tells you he doesn't understand and promises he won't be bidding with you again. It's a terrible situation for an auctioneer, so it's imperative to have a system where nobody can be tied for the same bid.

[seablaster]

If "Bidder A" makes an $1100 max bid and is currently leading at $1000, he still claimed that $1100 slot first. He was the first person to stake out and claim that max, that slot. He was the first to pledge his money at that level. Therefore, he should be rewarded for that-- and the reward comes in the form of winning in a tie situation. The tie should favor the man who stepped up first. So when "Bidder B" comes in at $1100, "Bidder A"' should still now lead at $1100, as his max gets triggered.

Same scenario should happen if "Bidder A" makes a bid of $1000 and is leading. Then he decides he's willing to pay more, and subsequently ups his max to $1100. He still was the first one to be willing to pony up $1100, so his bid should take precedence over any later comer. "Bidder A" isn't "bullying" other bidders; he stepped up first with his money.

I agree with this wholeheartedly.

The same situation could still arise in a live auction. Suppose bidder A is winning at $1000. Bidder B and bidder C are both interested at $1100. If Bidder B get his paddle up a fraction of a second before bidder C, bidder B is still the high bidder despite the fact that the other party wished to execute an equivalent bid.

In all of the scenarios described, all the parties not currently winning still have the opportunity to bid. By allowing a party to occupy a bid increment of their choosing, it doesn't prevent any interested party from bidding further.

[Stonepony]

Since I ran auctions for many years, let me respond to a few of the issues brought up here.

First, I know some bidders feel a 10% increment is too high, and would prefer to be able to raise a bid 2% or 5%, more like we can do on ebay. What they fail to realize is it makes it just as easy for that other bidder to top you. So you may not like to raise a bid 10%, but it might just be enough to knock out the competition and win you the lot. If you could raise it 2%, the next guy would have no trouble topping you also.

And with regard to alternate increments only on ceiling bids, I agree completely with REA's system. As an auctioneer, you never want to have a situation where two bidders are tied at the same bid. You especially don't want to have a tie for the winning bid. Here's why: only one of them can win the lot. When you tell the winning bidder he won, he always thanks you and tells you what a fair system it is. And then, when you tell the other guy he lost, he screams and yells and tells you he doesn't understand and promises he won't be bidding with you again. It's a terrible situation for an auctioneer, so it's imperative to have a system where nobody can be tied for the same bid.

I disagree with this. On a current $3000 lot , if my top is $3200... I can't bid it. I lose and Consignor loses if no one bids the required $3300. Your statement that it's "easier" for lower increment bids to be topped is obvious... But irrelevant. The bottom line is I believe people are missing out in desired lots, and money is being left on table with large increment jumps.

[barrysloate]

I disagree with this. On a current $3000 lot , if my top is $3200... I can't bid it. I lose and Consignor loses if no one bids the required $3300. Your statement that it's "easier" for lower increment bids to be topped is obvious... But irrelevant. The bottom line is I believe people are missing out in desired lots, and money is being left on table with large increment jumps.

But all the auction houses have software which is preset at 10%, or some other standard increment. So the next one after $3000 is usually $3300. What if you only wanted to bid $3165 on top of a $3000? How could the software accept it? Some actually use increments other than 10%. For example, from $1000 to $2400, the limit might be $100. So from $2200 to $2300, the increase is more like 5%. But at $2500, a $250 increment kicks in. Again, everything is preset, I don't know how the software designer can anticipate every increment that bidders may want to place.

Ebay allows you to type in any bid you want, including pennies if you so desire. But auction house increments are predetermined.

[Stonepony]

I have no answers. Just seems there's a lot of room above a $5000 bid before the 10% increment of $5500

[ullmandds]

I too agree that AH's are missing out by having such high % bidding increments...less bidders ultimately make it to overtime bidding(with some houses)...and for people like me who bid impulsively and sometimes under the influence...I'd be more apt to bid with smaller jumps!

[barrysloate]

Dave and Pete,
Keep in mind that auction houses all have extended bidding. Under the current system, most end between two and four in the morning. The one thing that would make them even longer is smaller bidding increments, because it would take more bids for lots to reach their max. If you want to have 5% increases across the board, expect the larger auctions to end sometime in the middle of the next day. It's not practical.

That said, not all use the 10% increment. REA is one of them. The increases range anywhere from 4% to 10%, depending on where you are in the bidding. It's a balancing act to find what increments work the best. And please keep in mind when we have threads about the best ways to end auctions, there is absolutely no consensus of opinion. So there is simply no way to make everyone happy.

[Leon]

Dave and Pete,
........ So there is simply no way to make everyone happy.

I wholeheartedly concur!!

[ullmandds]

Agreed!

[MVSNYC]

I never check price guides...ever. VCP, SMR, MPH, LOL, LMK, FYI, or even SOL. ;)

My focus is, and always has been, T206...after 25 years of collecting, I think I have a good sense of values. If something pops up and want a price opinion, I'll ask a friend or two, but never check price guides at all.

I watch a card, and if I want it, I bid. if I really want it, I bid strong. I bid up to what i'm comfortable spending.

[Stonepony]

I wholeheartedly concur!!

Agreed!

[scooter729]

I do like the REA method and am fine with how it is structured, with one exception. I wish the bidding increments from $500 - $1000 weren't done in $100 increments.

I remember an item last year which ended with a $500 bid. I considered bidding higher, but the next bid - $600 - is a 20% increase when going up from $500. Until you get to $1000, all increments from $500 to $1000 are increments between 10% and 20%. (Same is true for those bids under $500, but I know virtually nothing at REA sells for less than $500, so it's a bit of a moot point.) No other auction house has a bidding percentage increase to the next increment in the 15% - 20% range (that I am aware of).

What if the $50 bidding increments continued a bit higher, maybe even just to $700 or $800 if not $1000, then kicked over to $100 increments? I would imagine a smaller increment on those items in the $500 - $700 range could garner an extra bid or two, rather than taking a 20% bidding leap to the next increment. I understand most REA items are over $1000 and not even in this range, but is a valid point on those which do fall in this range.

Thanks,
Scott

[Leon]

Arrived today...it's a bit pixelated due to the hi res scan but "See Ma, no white dot :)" The card is much more clear in person. I was told this was a more clear one than the other that would have been on the sheet but I have looked at quite a few and it's still hard for me to tell. Some just look fuzzier than others and in person this one isn't too fuzzy.

http://luckeycards.com/pr319ruth144.jpg

[frankbmd]

Arrived today...it's a bit pixelated due to the hi res scan but "See Ma, no white dot :)" The card is much more clear in person. I was told this was a more clear one than the other that would have been on the sheet but I have looked at quite a few and it's still hard for me to tell. Some just look fuzzier than others and in person this one isn't too fuzzy.

http://luckeycards.com/pr319ruth144.jpg


For crying out loud Leon. You start a quasi-scientific psychological thread with 52 posts and then tell us that the whole damn thread was generated because of a phantom white dot. You should be ashamed. If I could spell fraudulent, I might even use it in this post. Maybe Skrubinski was right.:D:D:D

[Bocabirdman]

I have no answers. Just seems there's a lot of room above a $5000 bid before the 10% increment of $5500

Using these variables, a fixed bid increment will either cost the consignor money or it will create ill will from a bidder who bids in a moment of weakness. Would it be too much to turn off incremental bidding for the last 60 minutes and go with an "Any Advance?" format? If the Auction House uses the Extended Bidding, then turn it off for that period. Using a "IF >" filter would seem an easy programming adjustment. The auction programs already increase the bid increment at pre-determined values. They surely could have it decrease.:)

[chernieto]

I do like the REA method and am fine with how it is structured, with one exception. I wish the bidding increments from $500 - $1000 weren't done in $100 increments.

I remember an item last year which ended with a $500 bid. I considered bidding higher, but the next bid - $600 - is a 20% increase when going up from $500. Until you get to $1000, all increments from $500 to $1000 are increments between 10% and 20%. (Same is true for those bids under $500, but I know virtually nothing at REA sells for less than $500, so it's a bit of a moot point.) No other auction house has a bidding percentage increase to the next increment in the 15% - 20% range (that I am aware of).

What if the $50 bidding increments continued a bit higher, maybe even just to $700 or $800 if not $1000, then kicked over to $100 increments? I would imagine a smaller increment on those items in the $500 - $700 range could garner an extra bid or two, rather than taking a 20% bidding leap to the next increment. I understand most REA items are over $1000 and not even in this range, but is a valid point on those which do fall in this range.

Thanks,
Scott

I agree 20% increments at this level seem too high. As a bidder looking at a a 2k or 3k lot a lot of times I would pay 5% higher than the current bid, but give up on the larger increments.
& With REA I admit I have lost lots because I was unable to cover the "Evens" instead of "odd"s & would like to have put a Max several bid increments higher & did not time waiting for the next bid to jump back in on the preferred levels. I believe lower increments leads to more bids and bidders and higher prices for the auction house and consignors as well as better bidding for bidders.
Just one guys opinion who messed up REA bidding in the past

[glchen]

Using these variables, a fixed bid increment will either cost the consignor money or it will create ill will from a bidder who bids in a moment of weakness. Would it be too much to turn off incremental bidding for the last 60 minutes and go with an "Any Advance?" format? If the Auction House uses the Extended Bidding, then turn it off for that period. Using a "IF >" filter would seem an easy programming adjustment. The auction programs already increase the bid increment at pre-determined values. They surely could have it decrease.:)

If this happened in REA, the auction would never end. :D