How do EBAY DUTCH auctions work?

[Madcowz]

I'm confused as to how the winning bid system exactly works with ebay DUTCH auctions. The help section states:



<< Bidders specify both a bid price and the quantity they want to buy.
All winning bidders pay the same price per item?which is the lowest successful bid. This might be less than what you bid!
If there are more buyers than items, the earliest successful bids get the goods.
Higher bidders are more likely to get the quantities they've asked for.
Proxy bidding is not used in Dutch Auctions.

Here are some examples of how Dutch Auctions work:

A seller has 10 pens for auction at $1 each. 10 people bid $1 for one pen each. In this case, all 10 bidders will win a pen for $1.
OR
Let's say that 5 people bid $1.25 for one pen each and 10 others bid $1. The minimum bid for the pen will be raised to $1.25 because demand exceeds supply. Because the $1.25 bidders bid higher than the $1 bidders, they will be guaranteed a pen. The other 5 pens will go to the earliest $1 bidders. The final price for each pen will be $1 (even though someone placed a high bid of $1.25) since all winning bidders pay the same price ? which is the lowest successful bid. >>




Since there's no proxy bidding and every winner pays the same price, say if I bid $100 for an item that is currently at $70 (mimimum bidding being $71) and I win, does that mean I pay $70? That makes no sense, b/c if there's no proxy bidding, doesn't it mean that my bid is at $100 and I should win at $100? Can someone clear this confusion up? Also, is it generally a good or bad idea to snipe on a dutch auction (bid at the last few minutes or seconds)?

 

[PsychoAndy]

dude, just look at some dutch auctions online. lets say we got 4 items

bidders are as follows

1 @120
1@ 100
1@ 95
1@ 90

if the auction closes with no more bids then everyone pays $90. sniping a dutch auction? i think sniping period is incredibly stupid. just put in the price you wanna pay and be done with it. everyone sees the price you bid, and as long as your bid is high enough you'll be fine. earlier bids of the same amt take precedence tho

 

[amnesiac]

Sniping is important.
Let's say an item that you want is currently $50 and costs $150 in stores.
I put a bid of $51. Rival bidder sees this, puts it up to $70. I put it up to $71, bidder bumps it to $80, etc.
Many bidders on ebay have the *must-win* mentality even if it is at additional expense.

So I leave the item at $50 until there is a minute left in the auction, then test the waters. Often I'll get the item for just slightly above the last bid.

 

[Iron Woode]

Dutch auctions are cool when you need lots of something.

The process is very simple.

5 items up for grabs. People bid like normal. 1st bid 5.00. 2nd bid 7.00 3rd bid 8.00 4th bid 9.00 5th bid 12.00

If 5 people bid for 1 item each then everyone gets 1 item at the lowest successfull bid which is 5.00.

If more than 5 people bid or if people bid on 2 or more items, then the first set of bidder(s) wins and pays the lowest bid, which is 5.00 per item.

oops: i also think that the higher you bid the greater your chance of getting the item is because this moves you up the pecking order.

 

[Hossenfeffer]

<< Sniping is important >>

Nah, not important, just another "technique" to bidding.