A few thoughts on REA bidding

[M's_Fan]

REA is a great company that does a lot of things right. So I'm not a hater. But I do think they could improve things with their bidding system.

I have two observations about REA's bidding system:

1. I wish the slots weren't so wide apart. It is sometimes the case that I would raise the current bid, but the next slot is more than I want to pay for the card. There is no in-between. The result is this forces the bidder to make one of two choices: (1) Decide you want this card so much, you'll overpay for it, and bid into the next slot even though you would prefer to bid less, or (2) you decide you don't want to overpay, so you don't bid at all. This leads to the following result: (1) some auctions go for more than they would have otherwise (with a smaller gap between slots), because bidders are forced to bid according to REA's wide slots, or (2) the auction goes for less than it might have, because bidders walk away rather than overpaying for the card.

I think that situation (1) happens about half the time, and situation (2) the other half. If REA would narrow the gaps between bids, their auctions in the aggregate wouldn't go for less, they would just be priced more accurately (some lower, some higher).

2. My biggest complaint, however, is that the "autobid" slot is set to TWO slots ahead of the next bid. For example, a Babe Ruth card currently has the high bid at $10,000. You can bid $11,000, or you can "autobid" for $13,000, but you can't bid and occupy the $12,000 slot. Even if you bid $11,000, you can't raise your own bid to $12,000. So you either bid $11,000 or $13,000. Let's say the same card sold in a recent auction for $11,500. You are willing to bid $12,000, but you don't want to overypay by $1,500. Let's say you bid $11,000. Once you bid $11,000, someone else can take the $12,000 slot, but not you. Let's say that someone else does take the $12,000 slot. You now have to bid $13,000, or lose. The auction ends, and you lose, tough luck. You wanted to bid $12,000 on the card, but you couldn't.

The situation described above has actually happened to me in last year's REA auction. I remember thinking at the time, "Next year I got to get my bids in early to occupy the slots I want!" I then started thinking how ridiculous it is that I'm forced to think like this.

Anyone else agree or disagree?

I just wish they would do an eBay style system, where you can enter in whatever amount you want to bid. Add the waiting period to prevent sniping, that's fine if they want to do that. But the slotting system and autobid system they have set up very often does not allow a bidder to accurately bid what he/she thinks the item is worth.

[barrysloate]

Disagree. The auto-bid has to be set in alternate bids, and I've explained why so many times I couldn't bear to explain it again.

[barrysloate]

To add: if these online auctions worked like ebay the bonus bidding period would last about two days. Ebay increments are tiny because ebay lots close at a precise second. When you place a bid in REA you add 15 minutes to the auction. So with tiny increments the roughly eight to ten hour bonus period would turn into a fifty hour bonus period. Rob has painstakingly thought out the process and I think it works as well as it possibly can.

[Jim VB]

Barry's correct. The Auto-bid increments have to alternate or else people could play a blocking game. In the example you use: The Ruth is at $10,000. You bid $11,000. And you select $12,000 as a block. If someone else bids, he can't top you without going to $13,000. If no one bids, are you willing to pay the $12,000?

And as far as the increments being far apart, that only becomes an issue when the price gets up there. On a $10,000+ item, you wouldn't want the bidding increments to be $50.00. (This doesn't table well, but it's listed in their Terms & Conditions.)



Bidding increment table follows:



Minimum Value Maximum Value Expected Bid Increment



from US $ 0 to US $ 499 US $ 50

from US $ 500 to US $ 1999 US $ 100

from US $ 2000 to US $ 4999 US $ 250

from US $ 5000 to US $ 9999 US $ 500

from US $ 10000 to US $ 19999 US $ 1000

from US $ 20000 to US $ 49999 US $ 2500

from US $ 50000 to US $ 99999 US $ 5000

from US $ 100000 to US $ 499999 US $ 10000

from US $ 500000 to US $ 999999 US $ 50000

from US $ 1000000 and above US $ 100000

[Tcards-Please]

Originally Posted by barrysloate

To add: if these online auctions worked like ebay the bonus bidding period would last about two days. Ebay increments are tiny because ebay lots close at a precise second. When you place a bid in REA you add 15 minutes to the auction. So with tiny increments the roughly eight to ten hour bonus period would turn into a fifty hour bonus period. Rob has painstakingly thought out the process and I think it works as well as it possibly can.

Barry,

Completely agree with you. I think the process is just fine the way it is.

[uffda51]

The issue for me is, by how much does the winner have to top the underbidder? I've lost umpteen ebay auctions by one dollar, when a dollar represented barely more than 1% of the selling price. I've even lost ebay lots by one cent. Any winning bid should top the underbidder by at least 10% or 5%, or any other published increment that is significant. Ebay is like a videogame with prizes.

REA's increments are clearly indicated and bidders have weeks to figure out their strategy. And as a consignor, do you want the winner to top a $5000 bid by $500, for example? Or by $50? Or by $21.17?

[oldjudge]

One way to solve the problem would be to let bidders bid any absolute level they wanted. I believe under Rob's current system, if a lot is priced at $10,000, the bidder can only bid, as a fixed amount, $11,000. He (or she) can not bid $17,000 if for some reason they wanted to take the bidding to that level. Such a change would obviate the need to alter the autobid system.

[Abravefan11]

Originally Posted by uffda51

The issue for me is, by how much does the winner have to top the underbidder?

Bruce,

If your snipe or max bid falls short of Ebay's next bid increment, even if it is higher than the current bid it won't win.

Current Price

Bid Increment

$ 0.01 - $ 0.99 $ 0.05

$ 1.00 - $ 4.99 $ 0.25

$ 5.00 - $ 24.99 $ 0.50

$ 25.00 - $ 99.99 $ 1.00

$ 100.00 - $ 249.99 $ 2.50

$ 250.00 - $ 499.99 $ 5.00

$ 500.00 - $ 999.99 $ 10.00

$ 1000.00 - $ 2499.99 $ 25.00

$ 2500.00 - $ 4999.99 $ 50.00

$ 5000.00 and up $ 100.00

Current auction item is at $950

I set a snipe for $1,100

You set a snipe for $1,110

If I get my bid in one second before you I will win.

[E93]

Originally Posted by Jim VB

Barry's correct. The Auto-bid increments have to alternate or else people could play a blocking game. In the example you use: The Ruth is at $10,000. You bid $11,000. And you select $12,000 as a block. If someone else bids, he can't top you without going to $13,000. If no one bids, are you willing to pay the $12,000?
[/B]

This does not keep me up at night (the way this auction will on May 1st ), but in the given scenario, why could the auction software not accept the 11k bid with an "up to 12k" option. If someone bids 12k, then it registers my 12k bid and tells the latecomer to the 12k level that he has been beaten to punch by an autobid and the next bid is 13k. If he were smart, he would know that there were no more further autobids in place or the next option would have been 14k.

JimB

[Leon]

Originally Posted by E93

This does not keep me up at night (the way this auction will on May 1st ), but in the given scenario, why could the auction software not accept the 11k bid with an "up to 12k" option. If someone bids 12k, then it registers my 12k bid and tells the latecomer to the 12k level that he has been beaten to punch by an autobid and the next bid is 13k. If he were smart, he would know that there were no more further autobids in place or the next option would have been 14k.

JimB

Correct and has happened to me on several occasions.

[collectbaseball]

Originally Posted by E93

This does not keep me up at night (the way this auction will on May 1st ), but in the given scenario, why could the auction software not accept the 11k bid with an "up to 12k" option. If someone bids 12k, then it registers my 12k bid and tells the latecomer to the 12k level that he has been beaten to punch by an autobid and the next bid is 13k. If he were smart, he would know that there were no more further autobids in place or the next option would have been 14k.

JimB

I believe this is how ebay autobidding works -- if I place a max bid of $51 and someone comes along and places a $51 bid, I am still the high bidder at $51. But it indicates that the next possible bid is $52, so obviously the $51 is the highest max bid.

[barrysloate]

Jim- much to my chagrin the auction software I had did not necessitate alternate ceiling bids but allowed bidders to do it exactly as you said- if you bid 12K first and then they set their ceiling to 12K, they would be told somebody got there first who was the high bidder. Sounds fair, right?

Here is what really happens: bidders become irate, they don't understand what's going on, and they want to know why they were not high. They would call me at 1:00 AM to debate it, usually in the upper decibel level. To say it was a pain in the ass would be understating it. With alternate increments, that will never happen. Nobody will ever be tied.

[oldjudge]

The reason the autobid is set as it is is so that a bidder never has to bid more than one increment higher than an EXISTING bid. If a bidder bid $10,000 on a lot and leaves an autobid for $11,000 then think how the system works. A new bidder sees a $10,000 high bid and he enters his bid at $11,000. This is one increment over the existing bid and he should be the high bid or be immediately topped by a $12,000 up to bid. Instead his bid is rejected and he is given the option of bidding $12,000. The second bidder is therefore denied the opportunity to top an existing bid by only one increment, and this is counter to the way that virtually every auction is run. Like I said, if bidders were allowed to bid any fixed increment they wanted (the way many auctions are structured) then a bidder could occupy any bid slot that he wanted.

[M's_Fan]

Thanks for your responses everyone, some good points were made. Here is what I think:

In the example you use: The Ruth is at $10,000. You bid $11,000. And you select $12,000 as a block. If someone else bids, he can't top you without going to $13,000. If no one bids, are you willing to pay the $12,000?

Jim, I would do it this way: if the auction is at $10,000, and if I were allowed to "autobid" to $12,000, the auction should then show the high bid is currently at $11,000. If nobody else bids $12,000, then I should take it home for $11,000. If someone else comes along and bids $12,000, that should raise the price to $12,000, but I would be shown as the current high bidder since I bid first.

Bruce, you didn't likely lose umpteen eBay auctions by a dollar, you were likely just outbid, and the final price was a dollar higher than yours. You don't know what the high bidder actually bid as his high price, it could have been a dollar or thousands of dollars higher than your bid, but it would still show that the closing price was just $1 or so higher than your highest bid. Likewise, when you lose an auction on REA, you can't say that you were outbid by only $1,000 (or whatever the amount was until the next slot), because you don't know what the bidder's autobid limit was set to.

However, you make a really good point about the auction lasting too long if bid increments were tiny. I just think the current gaps are too wide, and should be cut in half. I don't think this would lengthen the auction.

I would also cut down the time added on from 15 minutes to 5 minutes. After a month to figure out what you need to bid, I don't think you need all that much more to decide if you want to up your bid if you have been outbid.

[M's_Fan]

Originally Posted by oldjudge

The reason the autobid is set as it is is so that a bidder never has to bid more than one increment higher than an EXISTING bid. If a bidder bid $10,000 on a lot and leaves an autobid for $11,000 then think how the system works. A new bidder sees a $10,000 high bid and he enters his bid at $11,000. This is one increment over the existing bid and he should be the high bid or be immediately topped by a $12,000 up to bid. Instead his bid is rejected and he is given the option of bidding $13,000. The second bidder is therefore denied the opportunity to top an existing bid by only one increment, and this is counter to the way that virtually every auction is run. Like I said, if bidders were allowed to bid any fixed increment they wanted (the way many auctions are structured) then a bidder could occupy any bid slot that he wanted.

+1

[barrysloate]

Any system that would get the auctions to end earlier is a good one. When my bonus period started, the increments were 15 minutes. At a certain point they decreased to 10 minutes, and finally to 5 minutes. That works well because even bidders with multiple lots pending are dropping out on many as the auction winds down, so they don't need as much time to execute all their remaining bids. But anything to shorten it is a plus.

[M's_Fan]

Originally Posted by barrysloate

Jim- much to my chagrin the auction software I had did not necessitate alternate ceiling bids but allowed bidders to do it exactly as you said- if you bid 12K first and then they set their ceiling to 12K, they would be told somebody got there first who was the high bidder. Sounds fair, right?

Here is what really happens: bidders become irate, they don't understand what's going on, and they want to know why they were not high. They would call me at 1:00 AM to debate it, usually in the upper decibel level. To say it was a pain in the ass would be understating it. With alternate increments, that will never happen. Nobody will ever be tied.

This is how eBay works, I wonder if these knuckleheads get irate and call eBay when they tie with another bidder? I doubt that, for a couple of reasons: (1) When you tie with another bidder on eBay, but you didn't bid first, it simply says "you have been outbid by another bidder." Then you have to bid more. Its very simple. (2) eBay doesn't have bid slots with wide gaps, so people don't get mad, they just bid more. When you have wide gaps, people tend to get frustrated when someone else is parking in the bid slot, and you have to fork out a bunch of dough for the next slot.

In sum, they wouldn't even have to know they tied with another bidder, you just tell them they have been outbid, the same is if someone autobid higher. No way that could confuse anyone.

[JJA]

Is there a way an auction house can tell what your max bid on auto bid is? Thus allowing shill bidding? Just curious. Always beeen hesitant to use that feature with anyone.

[M's_Fan]

Originally Posted by JJA

Is there a way an auction house can tell what your max bid on auto bid is? Thus allowing shill bidding? Just curious. Always beeen hesitant to use that feature with anyone.

REA bids are totally confidential, and not even REA knows what your max bid is. According to their website.

[calvindog]

Originally Posted by JJA

Is there a way an auction house can tell what your max bid on auto bid is? Thus allowing shill bidding? Just curious. Always beeen hesitant to use that feature with anyone.

Maybe if Doug Allen speaks at the next Net 54 dinner (RIP) he could shed some light on this subject. I mean assuming his bellyache doesn't reoccur. And he's not required to take an oath first.

[Rob D.]

Three-plus hours it took. Were you at Peter Luger?

[Peter_Spaeth]

Originally Posted by Rob D.

Three-plus hours it took. Were you at Peter Luger?

He was reviewing VCP for more Goodwin record prices.