OK, so I'm looking for a copy of the Codex Seraphinianus one day, a book legendary in the odd circles where I sometimes hang out (do a search on the title in Google for more information; I'm not going to give you any links here because you might follow them and never come back). Alibris and Amazon don't have it. Bibliofind says that there's a copy of the Spanish version at Moe's Books (but it's US$450, and I don't really want the Spanish version anyway, although the language isn't all that relevant with this particular book), and a copy of the Italian version at Book Beat for a mere $300.
The Italian version is said to be very nice, so I give Book Beat a call. They've already sold it. I chat with the guy for a bit; he says that the English version is especially hard to get, and is likely to run me US$500-600. Ouch! I decide to try eBay next, although my only experience with eBay so far has been following funny URLs that people have sent me, pointing to eBay auctions of used underwear, human souls, and stuff like that.
eBay has one! It's the English version, and the current bid is a mere $200. The auction started a week ago, and has two hours to run. Talk about good timing! I check the seller's eBay profile, and he seems legitimate. I go to put in a bid, and eBay says I have to register. I fill out the registration form, and eBay says that I will get the confirmation email, containing the Magic Code that I need before I can bid "within 24 hours".
So I sit there checking my mail twice a minute, for a long time. After half an hour, I decide that there might possibly be a mail delay somewhere, so I do the eBay registration with a different email address, and start checking for new mail on both of them twice a minute. Somewhere in the back of my mind, I feel like an idiot, obsessing about all this when I ought to be Doing Useful Work. This feeling has no perceptible impact on my actual behavior.
After about an hour, with a mere 50 minutes left in the auction, the mail arrives! I quickly complete my eBay registration, and put in my bid. Now I'm the high bidder! I start reloading the page twice a minute, to make sure I'm still the high bidder. I go down the hall and brag to one or two victims about how I'm in my first eBay auction, and how exciting it all is. They kindly pretend interest. I go back to my office and continue reloading the page.
It occurs to me that I'm actually willing to pay a bit more than my initial maximum bid, and (after reading the eBay Bidding FAQ to make sure I understand how to do it) I raise my bid. Reload the page a few more times. Decide I'm willing to pay even a bit more than that for the book, and raise my bid again. Reload the page some more. Tension mounts!
Five minutes to the end of the auction, and I'm still the high bidder, at my initial price (there haven't been any bids today except for my three). Three minutes. One minute. Forty-five seconds. Then suddenly...
At thirty seconds to the end of the auction, I'm still high bidder, but I'm paying forty bucks more than I was a minute ago; someone has swooped in and placed a last-minute bid that's higher than my initial maximum bid, but not higher than my third, for-sure-this-time, final bid. Hah!
Fifteen seconds left, no change. Five seconds left. Then the auction ends, and I win! I am ridiculously pleased by this. I send email off to the seller.
OK, end of thrilling story. Now let's think about this bidding stuff, and strategies.
The three people who bid in the auction before me were all newbies like me; the guy who rushed in at the last instant was a veteran of at least 75 previous auctions. Feller down the hall here says that last-instant action on eBay auctions is very common. Why should that be?
The way eBay works (for these auctions at least) is that you give your maximum bid, and if your maximum bid is the highest when the auction ends, you pay a slight increment over the second-highest maximum bid. Which is to say, you pay the smallest amount that no one else was willing to pay. At any time during the auction, all you can tell is who the current high bidder is, and how much he'd end up paying if the auction were to end now. That is, you basically find out the maximum bid of the current second-highest bidder.
If everyone were rational, this would be equivalent to a closed-bid system where everyone just sent in a single sealed bid, and the person sending in the highest one paid a small increment over the second-highest. But not everyone's rational. How can we exploit this to our advantage?
I don't think it can ever make sense to bid anything but what the item is really worth to you. (We're going to ignore the complexities introduced by the ability to retract bids, because that ability is so abusable that eBay has various sanctions in place against anyone who does it systematically.) If you bid less than what it's worth, the only consequence is that in some circumstances you'll miss an opportunity to get it at or below its value. If you bid more than that it's worth, the only consequence is that you might end up paying more than it's worth to get it. So we'll always bid the actual value; the remaining variable is the timing of the bid.
Here's one scenario where timing matters: if some bidders will sometimes, when they see that they are not currently the highest bidder, raise their bid over what it initially was, so as to become the highest bidder, we can avoid having that happen to us by submitting our bid as late as possible. This minimizes the time that these irrational bidders have to react by changing their bids upward. (These bidders are irrational because they're either underbidding to start with, or overbidding due to excitement, and neither of those behaviors is rational.) Of course we'll still put in a maximum bid of exactly what the item is worth to us (minus shipping and handling), which means if the current going-for price is already more than that we won't bother at all.
So our exploitative strategy is: at some small time interval before the auction ends, if the current going-for price is less than the value of the item to us, put in a bid at the value of the item to us.
I suspect there are client programs out there that do exactly that, and I suspect that the guy who zoomed into my auction thirty seconds before the close was using one. A quick Google search didn't find any descriptions of such clients, but I was probably just using the wrong keywords. It doesn't really matter, as I'm not really into exploiting the irrationality of others (at least not automatically!), and I don't plan to buy anything else on eBay anyway (Famous Last Words!).