The background

Don't tip your hand!

When you place a bid on an item using eBay instead of eSnipe, you announce your interest in it. That can draw the attention (and bids) of people who otherwise might have ignored it. If other bidders become familiar with your bidding habits and respect your judgment, the very fact that you bid on an item may increase its perceived value. The result: you pay more than you otherwise would, or perhaps you lose the auction.

This is one reason why many people wait until the last seconds of an auction to enter a bid. By the time the competition sees the bid, it's too late for them to respond. This strategy of bidding once, very late in an auction, is called sniping.

How bidding wars happen

Here's a story that often plays itself out in a hotly contested auction:

  • You place a bid you think is reasonable.
  • Later you check the auction and find someone has outbid you. You place a higher bid.
  • The other person finds you've outbid them, and places a higher bid.
  • Shortly before the end of the auction you check again and find
  • you've been outbid! No time to lose! Raise your bid!
  • The other bidder is checking the auction constantly now. The moment your bid appears, he or she tops it.
  • You check the auction...

In the heat of an auction's final minutes it's easy to forget what the item is really worth and bid more than you ever intended to. Such a "bidding war" makes both the loser and the winner unhappy: the loser lost the item, and the winner paid too much.