TOPIC: Applying bids to multi-item auctions

macxdmg wrote:

David Zych wrote: Necro-ing this thread (which was a really fun debate!) to reflect on the intervening year's worth of observing real auctions...

While I still maintain that the Lambda House model is theoretically sound, I have come to the conclusion that it has a serious practical flaw: far too many people (including some of its own "employees" i.e. auctioneers) don't actually understand it, and don't realize that they don't understand it.

So let's do something easier!

I have yet to run an auction myself, but if I were going to right now, here are the bidding rules I think I would use. Please feel free to use this if you like it (that's why I'm posting it).

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How bidding works:

• Bids should be sent to me via PM.
• Feel free to bid on any number of items for which there are multiples available.
• For the auctioneer's sanity, all bids must be divisible by $0.25 (per item), bids above $10 divisible by $1, and bids above $50 divisible by $5. If you try to bid $117.42, I will round it down to $115.
• Items will be won by the highest bidder(s), breaking ties in favor of the first bid received (which rewards early bidding).
• The price per item for all winners is equal to the highest bid that does NOT win all of its desired items (or the reserve price if no bid goes unfilled), so you can submit your top bid initially and not overpay.

Example: there are 5x Zyzzlvarian Ducks.
A bids $95 on 5x.
B bids $105 on 1x.
C bids $140 on 1x and $105 on 3x (wanting 4x total).
D bids $120 on 2x.
The winners are C,D,D,B,C for $105 each (because C still wanted more items at that price).

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This produces almost the same outcomes as the optimized Lambda House implementation, except that D is not charged an extra "bid increment" for having bid later than C; the fact that D bid higher is sufficient. Which means the auctioneer is comparatively giving up a little bit of money (pathological worst case: one bid increment per item in the auction), but I suspect also suffering less headache since the chronology of bids now only matters in an exact tie.

It's also similar to what Matthew ended up using in truedungeon.com/forum?view=topic&catid=584&id=251008 , except that I've added back an "auctioneer's sanity" provision in order to regain what I perceive as the upside of discrete bid increments.

I respectfully think bid increments are dumb. Use a google sheet and let people pay what they want, then if they’re willing to pay 12.80 per 1k gold or 194.20 for a wish ring the auction has the extra 4.20 on the wish ring and 0.30 per 1k. I also have never run an auction so $0.02.

Totally fair point of view.

Here's my thinking about what I perceive as the upside (which I realized I didn't actually explain before):

1. Quantizing bids ensures that every new bid processed by the auctioneer actually advances the progress of the auction by a noticeable amount. Otherwise, let's say I previously bid $105 for a PYP, and I observe that the current price increased to $105 but I'm not winning. So now I bid $105.17; I'm still not winning, but the current price is now $105.17. OK, next I'll try $106.03. Still no dice. OK, how about $106.92? Woohoo, now I'm winning one for $106.47 (which unbeknownst to me was the actual price I needed to beat). Result: I consumed three bids' worth of the auctioneer's time but the price only increased by $1.47. NB I'm not saying this is a *good* bidding strategy, only that it's something some people may feel inclined to do. Whereas with quantized bids I would have to at least go up by $5 each time, so the auctioneer is getting value from the time they spend processing my bids.

2. As a bidder, quantizing bids makes my decisions easier: if I've decided that a PYP is worth $110 to me but not $115 then I know exactly what I should bid (and I can take advantage of early-bidders-win-ties). Otherwise I have to sit there and agonize about whether it's best to bid $110.03, or $110.09, or maybe a bit more (the idea being to outguess by a few cents the other person who also values them at $110). Losing an auction because I bid $110 and others bid $115+ is much less disappointing than losing an auction because I bid $110.09 and someone else bid $110.11.

Per 1, each of those get the auction closer to successful funding, so while not great for the bidder, is knowledge and moves the auction, and can advance by a noticeable amount for various definitions of noticeable. This is wins all around IMO not anyone’s waste of time.

Per 2, I respectfully disagree. Purchases of 100.50 are easier for me when I value the item at 100 than 105 (or quite frankly 115). And .50 might be what is required to fund an auction, or not. I might be willing to pay 12.31 for a token and not 13 because at bulk 15 at 12.31 is worth while and at 13 is not, especially when the auctioneers send 15 tokens and didn’t request a more easily shippable option of 3 (assumptions made).

Side note, be happy for every auction that succeeds, even if you were outbid on the auction. Get the next one! You can do it!

macxdmg wrote: Per 1, each of those get the auction closer to successful funding, so while not great for the bidder, is knowledge and moves the auction, and can advance by a noticeable amount for various definitions of noticeable. This is wins all around IMO not anyone’s waste of time.

Per 2, I respectfully disagree. Purchases of 100.50 are easier for me when I value the item at 100 than 105 (or quite frankly 115). And .50 might be what is required to fund an auction, or not. I might be willing to pay 12.31 for a token and not 13 because at bulk 15 at 12.31 is worth while and at 13 is not, especially when the auctioneers send 15 tokens and didn’t request a more easily shippable option of 3 (assumptions made).

Side note, be happy for every auction that succeeds, even if you were outbid on the auction. Get the next one! You can do it!

If you win 15K in gold bars just ask the person running the auction to get you three 5K bars and adjust the shipping cost. They can add a note to the 8k order with TD to specify breakdown in gold bars.

edwin wrote:

macxdmg wrote: Per 1, each of those get the auction closer to successful funding, so while not great for the bidder, is knowledge and moves the auction, and can advance by a noticeable amount for various definitions of noticeable. This is wins all around IMO not anyone’s waste of time.

Per 2, I respectfully disagree. Purchases of 100.50 are easier for me when I value the item at 100 than 105 (or quite frankly 115). And .50 might be what is required to fund an auction, or not. I might be willing to pay 12.31 for a token and not 13 because at bulk 15 at 12.31 is worth while and at 13 is not, especially when the auctioneers send 15 tokens and didn’t request a more easily shippable option of 3 (assumptions made).

Side note, be happy for every auction that succeeds, even if you were outbid on the auction. Get the next one! You can do it!

If you win 15K in gold bars just ask the person running the auction to get you three 5K bars and adjust the shipping cost. They can add a note to the 8k order with TD to specify breakdown in gold bars.

This has never happened, I have never won that much gold. I do think that I should maybe request one instead of 5 more often though. Off to the mailroom!

Just going to put this out there. For those reading, just want to let you all know I participated in 9 auctions last year. Those who have run auctions know I was a heavy buyer of auctions last year. I think all total, I spent almost 5K in auctions from Nov '19 to Nov '20. So here are my experiences so that as people consider how they want to run their auction, they have a notion of what a buyer might look like. Again, its for insight...and just how as a BUYER, I watch these.

I will say:
1, I hate bid increments that reduce the number of price points in an auction and ultimately, I avoid auctions with bid increment. There is a certain psychology to auctions that using bid increments breaks. I for one use non-bid increment to get the prices to stick...amazing that someone will bid up to 105...but if my start bid was 80 and max bid was 105.50, I end up getting the win and additionally, because of my 105.50, my max bid will hold better than the other max bids of 105.

2. I do not participate in auctions of those who have either showed slow reaction time to updates or show terrible logistical ability. The auctioneer is governing $8,000 of bids and numerous emails, texts, and hopefully an elaborate tracking mechanism in the spreadsheet. How do we get proof? Well, I personally watch.

3. Bidding wars are healthy. War is when there is a contest over property. Well, we have seen the auctions take a strange turn where no one worries and everyone is patient...patience and auctions do not work. If you have attended a live auction, the "fear of missing out" and the anxiety that you won't get a chance by the time you need it is a valid reason for rise in prices. When I read of potential new auctions, I certainly show no fear...and simply wait it out. Its a strategy of FOMO that seems to be "negative" but it is part of the auction construct and has been for centuries.

4. If I am involved in an auction and I watch how "price rises" and if feel like they do not conform to the "rules of the auction", then I simply stop bidding. If I see a copy-paste of rules of auction and the moves of the bids do not act according to the rules as they were used in the past, I simply stop bidding. Wanna know how I do this? I bid something like this:
3 Darkwood Planks: Opening Bid $0.25, Max Bid $0.65
this lets me see if they are using increment in their mind as round numbers or using increment that the next bid must be that value(at minimum) above the lowest bid. If someone rejects my max bid of .65 for a 0.25 increment, I am out...if I see that they simply move me to $0.65 without any other bids (I am the opening bid)...I am out...anyway, my point is as a buyer of an auction I test the waters. Azzy, Matt, edwin can all attest as they were able to see my method...I bid a small amount...then I come in big once I understand the "rules".

5. On the gold method, I won all 43K of gold. When the order is placed, the auctioneer can ask for the increment and it happens. The company is very nice about this.

again...as a BUYER, this is how I look at things...as an auctioneer, the focus to get a successful auction needs to be tangible and real value to the buyer...to get enough bids to close a successful auction.