Once upon a time, I despised losing out on online auctions in their last few moments to the verdammt class of bidders known as snipers. From the buyer’s point of view, someone is riding in within seconds of the end of an auction and outbidding you by $1 or $2, or whatever the minimum increment turns out to be.

The other side of the coin are auctions that automatically continue for a certain time period if a bet is made within the last minute, or five minutes, or whatever you set it to be.

I have been on both sides of this debate. I used to bet by incrementing up the ladder until I just poked over the top. To me, I was looking to win by a small increment, so I bet that way – even though I understood the hidden-high-bet system, I had not quite internalized it. I was angry with snipers and imagined them sitting there, finger on the betting trigger, winning my item for their $2 increment.

I ended up changing my mind once I actually understood that no one loses an action for $2.

I think eBay’s position is probably right: stick what you are willing to pay as a hidden high bid and be done with it. If it wins, you win. If it does not, then someone wanted it more than you did.

On a recent auction I had a hidden bid of $350. I got the item for $305 because the other bidder did not have a higher reserve. To that person, it looks as though my $305 bid outdid their $303, and they might come back and say ‘well, I could have bet $310 and then I would have it…” Nope. I would still have it. The only way to get it is to bid more than what I have deemed it to be worth.

Now, it is true that I use a sniping service that blasts my bids in 5 seconds before the end, and I do think it saves me money. If the auction ends up with two or more people who are really interested in something, they might well want to duke it out in the last 5 minutes. In my example, above, I did not give that other bidder a chance to come back with $310 and goose up the price towards my $350.

And a seller might say, hang on there. I lost out because the two of you did not get into a last minute bidding war. On the other hand, a couple of snipers in the weeds with bids that they think can top the highest bid of another might push the price up higher than it would have otherwise.

With my hidden high bid, I could assume that all the other bidders are being reasonable in their high bids, so if I still an unreasonable number ($1000) then I am guaranteed to win it and not get screwed into paying too much. But all it takes is two people who think that way, and that $100 item is going to sell for $500. I do not know what others do, but I think the mutually assured destruction scenario means that most people do what they are supposed to do: pick the amount you are willing to pay, enter it, and then go think about something else.

Because you can see the ratcheting behavior is still prevalent when you look at the after-auction bid list, then sniping your high bid will save you money.

Is there a way to actually figure out which bidding system is the best for sellers?

I have no idea about how to do the math, but I would bet that the people who set up eBay sure do, and while the extended late time might be best in some cases, and the non-extended late time might be best in others, the fact that eBay uses the latter tells me that it is the best for sellers because they would clearly pick the system that maximizes the winning price, on average. And the only way for them to get more is for the seller to get more.

I really did change my mind about this over time, once I got over the anger and frustration from watching auctions end and seeing the number tick over during the last 10 seconds, thinking that someone was there just adding a few bucks. That is not true.

No one actually loses an online auction by $2.