The Strategy of Bidding at 4:30 AM?

[mechanicalman]

Like many on this board, I'm engaged in bidding on items from the major AHs, including last night's MHCC. My approach is this: determine the items in which I'm interested, do some pricing research on VCP, and then set my "indifference price" for each item - essentially the highest amount I'm willing to bid whereby I won't be terribly unhappy if I lose. I bid those prices with a few hours to go before the "closing" at 9PM, and then go about my night because I generally find that sleeping makes me better at my job.

At 4AM I woke up to let our new puppy out, and I checked my email to find a "closing soon" message from MHCC. No outbid emails, so I thought I might bat 1.000. I went back to sleep and woke up to find bids at 4:10 and then 5:35 AM EST, the latter a full 8.5 hours after the "close" of the auction. In sum, I lost one and won one. I'm fully satisfied with the outcome, but I'm curious about the mechanics of it all.

My question is this: what is the thought or strategy behind placing bids many hours after the "closing"? I am not trying to pass judgment at all, and this is not sour grapes, but I'm trying to understand the rationale behind that strategy. Seems like Russian Roulette to place a last minute bid even 1.5 hours after the "it's getting late, guys" email. I fully understand the last minute bidding of eBay where you can win stuff by bidding $5 more than the next dude. But with 10% minimum increments, it doesn't seem like the ebay mentality would apply.

Anyway, I'm just curious what prompts someone to take that approach. I'm sure there are those on this board who do it and are successful - would love to hear - without judgment - the rationale.

[tiger8mush]

Originally Posted by mechanicalman

My question is this: what is the thought or strategy behind placing bids many hours after the "closing"?

The rationale is hoping the competition won't be around at 5am when their bid is topped. Many of us are willing to go higher than our original "max bid" when we see we are outbid, in the spirit of "winning" in the heat of the moment.

[travrosty]

It's only a psychological thing, the person who is willing to pay the highest price wins, no matter when they place their bid. You can place your very max bid 5 seconds after the auction opens, and if no one wants it more than you do, you will win. People check late and bid late because they think of it as an advantage, but there is none, it makes people feel good.

[glynparson]

As they were outbid on something they wanted more but shifted the money over to this item that they threw an early bid on once the price of the other piece got past what they were willing to pay. Won't be the first or last time. Sometimes it's not a I want that card as much as they want to win something so they shift the bidding once another item gets to pricey for them.

[darwinbulldog]

There are also bidding cascades that sometimes don't start until the "fair warning" email has gone out. If I had perhaps 50x the card budget that I actually have, I'd just go ahead and put in my max bids early on, but I rarely see an auction catalog in which I can afford everything I want to bid on, so I put in placeholder bids in the opening hours of the auction, prioritize, and start working my way down my list as I'm bid past my max on each item. Maybe I'll end up getting the #8 item on my list, but I'm not going to bid on it in overtime until I know I won't be winning #1-#7. I assume others are doing the same thing.

Edited to add: Glenn and Glyn are in agreement.

[glchen]

I'm on the West Coast, so it's "only" 1-1:30am for me. For auctions where all lots end at one time, I do this frequently. The usual strategy is to put placeholder bids on any lot that you are interested in on the first day of the auction. Then during the late hours (e.g., 1am PST), you go through your list of items, and see if any of them seem undervalued, and put bids on them. Also, any items that you really want usually because they are really rare, where you are prepared to overpay, you also put bids. This strategy hinges on that many bidders don't put their max bids on the item. For example, if the item is rare, they are really not sure what the value is. For example, you have this rare Cobb card, and you think a $3000 max bid is a good price. You go to bed at 1am EST with the current price at $2500, and think you have a decent chance to win that item. The late night bidder thinks that $3250 what he wants to pay, and puts this bid down at 4am EST. You are asleep, so you never counter it. However, if that bidder put that $3250 bid down at midnight EST, and you were awake when you saw it, then you would have time to think about it. And you might think, "ehhh, you know, I don't see this card very often, this is more than I thought I'd want to pay, but what the heck, let's bid $3500." This is what the late night bidder is trying to prevent, giving other bidders the time to consider whether the max bid that they originally put down was truly their real max bid.

The drawback to this strategy is that sometimes the price of this card is fairly well known. That is, this card in this grade is sold relatively frequently, so you see the average selling price on VCP. Then what you might want to do early is to place your max bid at that level where if you win, your bid will be below VCP, but the next increment up would place the final price of the card above VCP. Or you put your max bid at the point just before the bid increments jump from a lower increment to a higher one. (e.g, up to $5000, the bid increment is $250, but after that, it's $500.) This is also a common strategy where bidders try to stake out these certain bid points.

[bobbyw8469]

I just put in max bids of what I am willing to pay and hit the sack. If someone outbids me, I rest easy knowing they didn't steal the item.

[mechanicalman]

Some really good points here. Appreciate everyone's thoughts. I'm fairly new to the game, so hearing these viewpoints is valuable. Might actually have to adjust my approach, and maybe my sleeping habits. Fortunately, I'm not one to pursue too many of those "once in a lifetime opportunities so market priced be damned" cards...

[x2drich2000]

I agree with the general feedback from everyone else. The exception being that I am on the east coast and typically getting up around 4:30-5 for work. It's a lot more convenient for me to go to bed early and then wake a little earlier than normal to place my final bids.

DJ

[BeanTown]

Any auction company that wants to keep open until 3,4,5 AM is just out dated. It clearly benefits the West coast. It seems the software is out there for any auction company that wants to go out there and get it.

Maybe its strategy for AHs to try to get "max" bids in from potential bidders. I wonder how many AHs can actually see the high bids being placed???

Would love to be TRON in any AHs computor software!!!!!

[gregr2]

Originally Posted by BeanTown

Any auction company that wants to keep open until 3,4,5 AM is just out dated. It clearly benefits the West coast. It seems the software is out there for any auction company that wants to go out there and get it.

Maybe its strategy for AHs to try to get "max" bids in from potential bidders. I wonder how many AHs can actually see the high bids beingplaced???

Last night as I was placing some ceiling bids I noticed the item was going up but NOT reaching my high bids. Its rare I ever place ceiling bids for this very reason and how shocked am I that when I woke up that my MAX bid was reached...

Would love to be TRON in the AHs computor software!!!!!

Take a look here, most AHs can't see the max bids.

http://net54baseball.com/showthread.php?t=212596

[doug.goodman]

Originally Posted by travrosty

It's only a psychological thing, the person who is willing to pay the highest price wins, no matter when they place their bid. You can place your very max bid 5 seconds after the auction opens, and if no one wants it more than you do, you will win. People check late and bid late because they think of it as an advantage, but there is none, it makes people feel good.

That's not exactly true.

Yes, you can place your "very" max bid 5 seconds after the auction opens, but it gives other bidders the entire auction to bid, and possibly bid again if their "max" bid wasn't enough. Auction fever. And if they do bid more than you, it gives you time to consider upping your own "very max bid, due to auction fever.

If you bid at the latest possible moment, then on ebay the other bidders have less time to out bid you (assuming that their snipe bid was less than yours), and in AH auctions, you have potentially outlasted the other bidders.

Yes, the person who wants to pay the most wins, but sometimes the person who wants to pay the most is pay more than they originally wanted to pay. The less time they have to think about it, the less chance there is that they will do it.