At 07:48 3/29/01, Sam wrote:
Something really strange happened to me on ebay today. The second bidder
informed that ebay informed him that the high bidder on a camera I sold
defaulted and that he was the high bidder.
Something else to watch for . . . check out the contact information about
the closing winner and the person who retracted just before auction
end. It doesn't happen that often that I'm aware of. Sometimes two
bidders will conspire to scare others bidders off . . . and drop a winning
price dramatically just before the auction ends through a retraction. The
strategy (one forbidden by eBay, but hard to prove) is based on the fact
that the closing price is set by the bid maximum entered by the 2nd highest
bidder . . . it is one bid increment above it.
Bidder #1, an innocent party to all this, places a bid on an item early
on. The bid maximum is below the average of what the item should close
at. Perhaps the individual has done this to "watch" the auction, maybe
with the intent to put in another, higher bid later.
Bidder #2 and Bidder #3 conspire to win the auction for Bidder #2 at a low
price by scaring off potential bidders. Here is how they do it:
Bidder #2 tests Bidder #1's maximum by first putting in a relatively low
bid maximum. If it trumps Bidder #1, then a second bid is immediately
entered with a ridiculously high maximum. However, the "current bid" still
shows only one increment above what Bidder #1's maximum is. Bidder #3,
very soon after that, trumps Bidder #2 with a bid that is just high enough
to do so. The price is now so high that nobody else is willing to try to
outbid it. (If it happens, #2 and #3 just quit and walk away from the
auction.) Then, just before auction close, Bidder #3 retracts. The price
drops back to something lower than average, and Bidder #2 wins . . . at one
bid increment above Bidder #1's low maximum.
If the closing price dropped dramatically when #3 retracted, the it could
be that he/she was shielding #2 from competition. If the price dropped
dramatically when the bidder retracted just before closing, it's cause for
suspicion. It gets even more suspicious if the winner and retracting
bidder live very, very near each other (same city/state).
-- John
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