Extended bidding, also known as an "anti-sniping" feature, allows for specific items to be extended past the auction close time if there are active bidders still placing bids. In most cases, a window is set (e.g. 2-5 minutes) and if a bid occurs within this window, the item is extended to allow bidding to continue. The argument is, if there are bidders still interested in the item, why close it? This is in contrast to a hard-close model where the auction (and all items) close at the same time.
Both scenarios exist in charity auctions and also on the Internet where eBay utilizes a "hard close" and Amazon Market Place has an extended bidding policy (with a 10 minute window). Each model drives different bidding behavior and its a fascinating topic to research.
So which method is better? At first glance you would say that it makes the most sense to extend an item if people are still bidding on it. However, at Handbid, we were not convinced. We wondered if the bidder's behavior would change if they knew that the item would be extended. Handbid has a Proxy Bid feature that allows the system to bid on the bidders behalf up to a maximum amount (that the bidder specifies). If each bidder interested in a item set a proxy bid with their true maximum price, why would you need extended bidding? In theory, you wouldn't. In fact, we felt that if bidders knew about extended bidding, they would not use the proxy bidding feature.
Here is where practice can trump theory. As we participated in Handbid auctions and observed bidders, we determined that our position was based on an assumption that didn't prove to be true.
That assumption was that people enter their maximum price when placing a proxy bid. Well, auction theory states that it is in the bidders best interest to do that; and, we would explain that to bidders until we were blue in the face, but it just didn't pan out that way. We saw numerous people at the end of the auction "freak out" when their proxy bid was trumped and scrambled to place a last minute bid on an item to win it.
Now Sherry Truhlar, a recognized auction expert, may tell you that all logic goes out the door at a charity event where bidders are vying to win an item and they will bid above their maximum. We agree that lots of logic goes out the door, that alcohol impairs judgment, that competition sets in, and thatt the bidder never entered their true maximum in the first place!
Either way, our assumptions didn't hold water, so now its time to implement extended bidding. We had a meeting coming up with Sherry in a week's time, and I wanted it done so I didn't have to explain to her why we didn't have it. So I threw the challenge down on the development team to get it done. Their estimate was "1 hour to complete". Taylor took on the challenge as we boarded a flight to Dallas. Here is a shot of him working at it at 30,000 feet.
By the time the fasten-seatbelt sign was back on, he was done and we were ready to test. How about that? Its ready to go and we are excited to offer this feature for our future auctions on Handbid. Here is how it will work
The Auction host will enable extended bidding and set a threshold window. If any bids are received on an item within this window, that item will be extended for that same period of time. For example, if the window is 5 minutes, then any items that have bids within the last 5 minutes will be extended for 5 minutes. This window is fully adjustable.
The mobile clients, web, and the BidPads will all be getting updates that reflect the extended bidding status. Items in extended bidding will be shown in a smart category that will show up on the clients.The BidPad update will also include a new slide for Handbid TV as well.
Let us know if you have any questions. As always, reach out to use if you are interested in using Handbid at your next auction, find us on Facebook at www.facebook.com/handbid or on twitter at @handbid.