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.