mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Sunday, April 12, 2009

The oddest auction system I've ever seen...

I'm a bit of an auction enthusiast. I've been buying stuff on eBay for nearly a decade, and selling stuff on eBay for almost as long. I also go to in-person auctions whenever I can, usually in the hopes of finding stuff that I can resell on eBay or at hamfests. I was an econ minor in college, so I'm always interested in markets, and auctions are generally one of the best examples of a completely efficient market - bringing a buyer and seller together and coming up with a price.

My mom, while somewhat internet-savy, doesn't believe in buying stuff online. She also doesn't cook as much as she used to, and has been eating quite a few Stouffer's Lean Cuisine meals. They are running a promo where you enter codes from the package, which give you points that you can use to buy stuff at auctions they run on their site. Since mom knew I buy and sell online, she gave me her account info and asked me if I wanted to use her points.

I looked around the site (registration required to see much of anything), and it is the oddest auction setup I've ever seen, for a couple reasons. It's basically designed in such a way as to eliminate all the advantages of a traditional online or brick and mortar auction.

The first thing that makes it odd is the lack of transparency. In an in-person auction, you see what the guy next to you is bidding, and adjust your bidding accordingly. On eBay, you see what the current bid is and how much more you need to bid to beat them. Yes, I realize there is more to eBay than that - the person could have a proxy bid set up, so you may need to bid higher, and many buyers snipe - bid at the last second - so you don't always know how much competition you have or how much they are going to bid.

But the Stouffer's site just has a place to put a bid in. You don't know how much other people are bidding, so you can't adjust your bid according to market prices. You have absolutely no frame of reference. You can't look at previous auctions and see what stuff has sold for so you have an idea of the market price, and you can't look at what the auction is currently going for to incrementally increase your bid. If you won - or lost, you have no idea if it's because you were one point high/low or 1,000.

The other thing that makes it challenging is that you aren't bidding in a recognizable currency. On eBay, if you want to buy a Wii, you know what they sell for in stores and can adjust your bidding accordingly. If you are bidding on a Wii in Stouffer's Points you have no frame of reference - how many points are in a dollar? What is the maximum number of points you should be willing to pay?

I realize there are auctions that mirror the first scenario's lack of transparency - sealed-bid auctions, for example, where potential buyers don't know how much their competitors are bidding. But I can't think of anything comparable to the second.

I haven't bid yet, mostly out of fear that I'm going to blow way too many points. Which is probably silly, since if I don't bid the points go unused, and it's not like if I bid perfectly I can do much with the leftover points. To Stouffer's credit, if you bid and lose, you get your points back, so there isn't any risk. Still, I consider myself an auction veteran, and this system confounds me.


At 4:13 AM, Anonymous real estate auctions said...

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