Targeting the Strategies of a Bid Sniper

Abstract

Bid sniping is a dubious practice used in online auctions whereby a bidder makes a bid in the closing moments in an attempt to deny other bidders time to react. The primary goal for a bid sniper is to win the auction for the lowest price possible, without the risk of being forced into submitting any higher bids if there is competition for the item. This paper investigates the phenomenon of bid sniping and its prevalence in commercial online auctions. We seek to show the extent of bid sniping, understand the rationale of why it occurs, what effect this has on the other auction participants, and what can be done to prevent the practice. Based on this understanding, we present a software bidding agent that follows a bid sniping strategy. The agent has the ability to suppress an auction's price through knowing when to bid, how much to bid, how to deal with rivals, and when to cease bidding. We also propose a new online auction format that can eliminate/reduce the effect of bid sniping. The proposal adds an undisclosed random time-out extension to an auction's finishing time to entice bidders to bid their maximum amount immediately or risk being excluded from the auction.

Online Auctions End Time and its Impact on Sales Success – Analysis of the Odds Ratio on a Selected Central European Market

“…An important topic discussed in the literature was the use of so-called snipers (programs that automatically submit an offer shortly before the end of the auction, often giving no chance to react to other bidders). Numerous studies have analyzed the impact of these programs on the following problems: an overstatement of the final price achieved in the auction (Bapna, Day, Rice 2020); the possibility of achieving price equilibrium (Bose, Daripa, 2017); dampening the dynamics of the auction (Trevathan, Read, Lee, Atkinson, 2011); dissuading customers from being able to make an effective offer (Backus, Blake, Masterov, Tadelis, 2015).…”

Towards a Theory of Special-purpose Program Obfuscation

“…4. Software agents for online auction sniping [51] may contain decision-making strategies that, if known to a competitor, could be circumvented. 5.…”

A Contingency Model of Bidding Strategies in Online Auctions in China

“…This series of bids will continue until the bid is raised to the bidder's desired pre-set maximum price. Some researchers highly recommend agent bidding due to its efficiency and competitive advantage over other bidders (Puro, Teich, Wallenius, & Wallenius, 2011;Trevathan & Read, 2011).…”