Preventing Auction Sniping With Variance?

[fpgaminer]

Auction sniping (bidding within the last minute or two) is often considered a problem, especially in high profile auctions like those put on by ASICMINER.  Personally, I enjoy the thrill of those auctions, but a lot of people do not, and I agree that it is not ideal.

One solution is extending the bidding by a certain amount of time each time a bid is placed, if the bid is placed close to auction closing (typically up to a maximum date/time).  This is a viable solution, but can cause the auction to drag out for too long.

A thought occurred to me.  What if the end time is left unknown to all except the auctioneer?  I will show an example:

This auction will end on May 5th, 00:00:00 UTC, +- 1 hour.
SHA-256 hash of real ending time:  22948fb57ed49f3f351873d6c6ecc19e2051168d8a6e5e7db52f0fdc46e2c221

The actual end-date for the auction is left unknown to all bidders, but they know that it will be within an hour of the specified time.  At May 5th, 01:00:00 UTC (the maximum closing time) the auctioneer will officially announce the real ending time, like so:

Real ending time: secretsalt May 4th, 23:35:13

All bids posted after that time are invalid.  All participants can verify that the real ending time posted matches the one originally established, by checking its hash.  The ending time cannot be guessed beforehand, thanks to the secretsalt.

With this system, it's impossible to snipe, since the ending time is not known.  Unlike the extension method, the auction still has a fixed length.  And my guess is that the uncertainty is also likely to drive bids higher than usual.

Thoughts?

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[tobobit]

Interesting idea, however not good for the procrastinator. Not all last minute bids are due to wanting to snipe.
I'm not sure what percentage of the market are procrastinators, but just something to think about.

[Coinseeker]

Your second solution while clever, may be confusing to users.  Confusion tends to reduce psrticipation in sales.  Not saying it can't be tried but that's my initial reaction when reading the idea.  Your first solution is a winner and is actually working extremely well on a site called Flippa.com.  On Flippa, once the auction time reaches a certain level, say 1 hour left, each following bid, adds 4 hours to the auction time. 

Now, they have some really long auctions over there, so 4 hours makes sense.  For a more eBay style auction, a 30m-1hour extension is probably sufficient.  Then again, maybe you can give the seller the option of how long the auction is extended.  Lots of ways to work this but this is a provable working style, on a multi-million dollar site.

Might I also suggest that you run standard sniper auctions and extension auctions, again giving the seller the option of what type of auction style they prefer.  Some items may attract higher bidders depending on the style.  Just food for thought.  Any case, I hope this helps and best of luck with the venture.

[TarunRai]

The Dynamic Closing feature is not always time consuming.

You can have additional options set. For instance:
- Set a small time duration by which you would want to extend the auction.
- Extend the auction to only limited products and not all products
- Limit the number of times an auction can be extended

Providing auctioneers with these additional functionalities will help you use the Dynamic Closing feature.