Hi,

There were only two bids for this auction, but I still can't understand it. The bid increment was $10, the opening bid was $500.

bidder1 kicked off the bidding and entered a proxy bid of $505, and since $500 was the opening bid, $500 was displayed as the current bid.

bidder2 decided to bid on the item. Next to the textbox where bidder2 entered his bid, there was a message that said bidder2 had to enter a price of $510 or more--$510 being the current price plus the minimum increment of $10. bidder2 entered a bid of $600, expecting his initial bid to be $510(the $500 current bid plus the minimum bid increment of $10).

No more bids were entered. What was the final selling price? (answer below)





















I would think that bidder2's bid of $510 would have beaten bidder1's initial bid of $500. Then, since bidder1's next bid was $505, it would have been irrelevant because it was lower than the current bid of $510. However, the final selling price was $515. When the two proxy bids were having at it, bidder2's actual bid was calculated with respect to the maximum value of bidder1's proxy bid, and then the minimum increment was added to that to establish the new current price. Since bidder2 entered a proxy bid with a higher maximum than bidder1's proxy bid, bidder1's initial bid was effectively changed from $500 to $505, and then bidder2's bid was determined relative to $505, which was $505 + $10 = $515.

Can you imagine a live auction taking place like that?

bidder1: "I bid $500"
auctioneer: "Will anyone give me $510?"
bidder2: "I bid $510"
auctioneer: "Hey bidder1, do I hear $520?"
bidder1: "Mr. Auctioneer, I was only willing to pay $505, so I am out."
auctioneer: "Change bidder1's initial bid to reflect his maximum price of $505."
bidder2: "what the??"
auctioneer: "Hey, bidder2. How high would you have bid on that item?"
bidder2: "Uh...well...errrm, I had a little more to go."
auctioneer: "Let the record reflect that bidder2's initial bid is being increased to $515".
bidder2: "what the??"
auctioneer: "Going once, going twice...Sold to bidder2 for $515!"
bidder2: "but...I never bid $515!??"
auctioneer: "Continuing on with lot number A25678. Will anyone give me $300 to start?"

Hi,

There were only two bids for this auction, but I still can't understand it. The bid increment was $10, the opening bid was $500.

bidder1 kicked off the bidding and entered a proxy bid of $505, and since $500 was the opening bid, $500 was displayed as the current bid.

bidder2 decided to bid on the item. Next to the textbox where bidder2 entered his bid, there was a message that said bidder2 had to enter a price of $510 or more--$510 being the current price plus the minimum increment of $10. bidder2 entered a bid of $600, expecting his initial bid to be $510(the $500 current bid plus the minimum bid increment of $10).

No more bids were entered. What was the final selling price? (answer below)
----------------
I would think that bidder2's bid of $510 would have beaten bidder1's initial bid of $500. Then, since bidder1's next bid was $505, it would have been irrelevant because it was lower than the current bid of $510. However, the final selling price was $515. When the two proxy bids were having at it, bidder2's actual bid was calculated with respect to the maximum value of bidder1's proxy bid, and then the minimum increment was added to that to establish the new current price. Since bidder2 entered a proxy bid with a higher maximum than bidder1's proxy bid, bidder1's initial bid was effectively changed from $500 to $505, and then bidder2's bid was determined relative to $505, which was $505 + $10 = $515.

Can you imagine a live auction taking place like that?

bidder1: "I bid $500"
auctioneer: "Will anyone give me $510?"
bidder2: "I bid $510"
auctioneer: "Hey bidder1, do I hear $520?"
bidder1: "Mr. Auctioneer, I was only willing to pay $505, so I am out."
auctioneer: "Change bidder1's initial bid to reflect his maximum price of $505."
bidder2: "what the??"
auctioneer: "Hey, bidder2. How high would you have bid on that item?"
bidder2: "Uh...well...errrm, I had a little more to go."
auctioneer: "Let the record reflect that bidder2's initial bid is being increased to $515".
bidder2: "what the??"
auctioneer: "Going once, going twice...Sold to bidder2 for $515!"
bidder2: "but...I never bid $515!??"
auctioneer: "Continuing on with lot number A25678. Will anyone give me $300 to start?"
Of course, that what proxy bidding is all about. Note also that if B2 had only bid $510, he would have got it for only $510, not $515. - TF

Gee-you must be new to auctions-or extremely ignorant. Proxy bidding is as old as auctions themselves

The whole idea behing proxy bidding is exactly the same as using a bidding agent. You tell them how much you are willing to bid max, and they bid up to that amount but no higher. Often the auctioneer does this, having been given a proxy bid before the auction starts. After each bid, if the proxy bid hasn't been reached, the auctioneer raises it up to the next notch, then allows the floor to either bid or let it stand. This happens all the time at auctions.

In this case, bidder 2 didn't enter a bid of $510, he entered a proxy bid of $600, and had forgone the right of having any say on the announced bid. This is one of the drawbacks of proxy bidding, but one which many accept. The alternative would be to only place single bids and hope that you don't provoke a bidding war, or, in the case of ebay, hope that your connection doesn't die just before the auction ends. It was therefore completely proper for his bid to be $10 more than the last bid was. I believe that ebay will entertain a high "split bid" such as bidder 1 did, as long as it's the highest bid. Had bidder 2 not entered a bid of $600, bidder 1 would've won the auction with a slit bid of $505.

Maybe you should actually go watch a few real auctions before you come troll here. It might help if you actually knew something about what you come here to rant about.

The whole idea behing proxy bidding is exactly the same as using a bidding agent.
So, change the names from bidder1 to Sotheby'sAgent1 and from bidder2 to Cristie'sAgent1. Is that the way they really run live auctions? How can they sort out what is what? I've only been to a few live auctions, and the ones I saw were very orderly: the bid's went up by the increment, and the high bidder won. The auctioneer didn't have to continually stop the auction and ask,

"Why did you drop out of the bidding, sir? Are you a bidding agent? Yes, ok what was your bid limit? Ok, let's back up the auction and increase the previously stated bids to reflect the proxy maximums that did not coincide with any actual bids."

It doesn't seem to me that you could ever run a live auction that way.

Or, do the bidding agents all huddle together and show each other their maximum bids, with each bidding agent demanding that they be allowed to verbally bid their maximums, so they all get in a line in ascending order, and shout out their maximum bids to the auctioneer?

agent1: "$501"

agent2: "$1,000"

agent3: "$1,753.50"

with the last bidding agent in line declaring:

agent4: "$1,763.50"

and then all the other bidders start jumping in?