Auction sniping

Auction sniping is the process of watching a timed online auction (such as on eBay), and placing a winning bid at the last possible moment (often seconds before the end of the auction), giving the other bidders no time to outbid the sniper. Some bidders do this manually, and others use software designed for the purpose. A bid sniper is a person or software agent who performs auction sniping. There are also online sniping services, where the software agent is run from a website rather than the sniper's own computer. This decreases the failure rate of the snipe, because the website is expected to have more reliable servers that might be quicker to react. Experienced bidders of online auctions with fixed ending times often prefer entering bids late in the auction to avoid bidding wars (multiple rounds of bidders each increasing their maximum bid to temporarily regain "current highest bid" status) or bid chasing (where the presence of an existing bid encourages others to bid on the same item). Economic analysis of sniping (Roth and Ockenfels, 2000[2]) suggests that it is a rational gain-maximizing (i.e., price-minimizing) strategy for bidders in auctions which fulfill two criteria: 1) the end time is rigidly fixed (such as those on eBay), and 2) it is possible to gain additional information about the "true" value of the item by inspecting previous bids. For example, a novice antiques buyer may prefer to bid in auctions which already have bids placed by more experienced antiques buyers, on the grounds that the items which the experienced buyers are interested in are more likely to be valuable. In this case, more informed buyers may delay bidding until the last minutes of the auction to avoid creating competition for their bids, leading to a lower winning bid. Analysis of actual winning bids on eBay (Yang and Kahng, 2006[3]) suggests that winning bidders are more likely to have placed a single bid late in the auction, rather than placing multiple incremental bids as the auction progresses. When bidders decide to use non-manual sniping, they lay their trust to either sniping software, or to an online sniping service, and provide them with their eBay username and password. To many bidders, this is a deterrent to using automated sniping services at all. Furthermore, unlike eBay, which transmits passwords from the bidder's browser in a secure manner, some online sniping services do not use a secure connection to transmit the eBay username and password from the bidder's browser to their servers. This effectively degrades the protection provided by eBay. 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