Penny Auctions

[hhinner]

I was just watching some current auctions (on web site front page). Two of them were down to last 14 secs, and each seemed to have two people bidding. Each time a bid (25 satang) was made the timer reset to 14 seconds. I expect that the two users were using the so called bid buddy automated bidding. Both these auctions were of the type where the winner gets his bids refunded (every time you bid it costs you 25 satang). So in this case it seems to me that the loser(s) pay for the item and lose their money for nothing. I would guess with a high value item the hope is that multiple bidders bid the price up to near market (or maybe wholesale) value or even more. The auctioneers get more than the item value (from multiple bidders) and losing bidders lose their money. If the auction is the so called zero bid auction all bidders are going to want to win to get something for free and hoping they can outlast other bidders with the same plan. If it's not a zero bid auction everybody loses all their bids but at least the winner gets the goods. So e.g. there are 3 bidders bidding for goods valued 2000 baht. To keep it simple, we'll say the winner gets the item for 1500 baht. So 3 people have bid up to 1500 baht (give or take 25 satang) and the auctioneers get 4500 baht. Of course, it's possible that different bidders join and drop out during the process, but there will always be at least two bidders until the end so the auctioneer is guaranteed at least double the winning bid (although there may be some reward to the winner such as the zero bid promotions).

To summarise:

Every bid you make costs you 25 satang.
Unless you win the auction you lose your money for nothing.
Automated bidding helps you make sure you stay in the auction.
Some auctions allow the bidder to get money back, but losers pay.
If a bid is made with less than 14 seconds to end of auction the auction is extended by 14 seconds.
Auctioneers are guaranteed at least double the winning bid.

Am I wrong? Have I misunderstood the system? What do others think?

[hhinner]

Google "penny auctions". That's what this is. Seems there are people who like them.

[dtaai-maai]

the loser(s) pay for the item and lose their money for nothing. I would guess with a high value item the hope is that multiple bidders bid the price up to near market (or maybe wholesale) value or even more. The auctioneers get more than the item value (from multiple bidders) and losing bidders lose their money. ...
So e.g. there are 3 bidders bidding for goods valued 2000 baht. To keep it simple, we'll say the winner gets the item for 1500 baht. So 3 people have bid up to 1500 baht (give or take 25 satang) and the auctioneers get 4500 baht.

Are you saying that if you bid, say, 1500 baht for something and are outbid, you lose the 1500 baht...? Surely that makes no sense at all?

[theprice01]

meh...i think i'll continue to take my chances at market village & HH shopping mall

[Billy Joe I]

Just went to the site and it costs either 0.25 baht or 5 baht to place a single bid depending on how you buy your bids!
This could quite quickly get expensive without you ever winning something.... The idea is for them to get as many bids from you as possible during the auction. Seems pretty dodgy to me so I recon one to avoid!

[theprice01]

there are similar websites in the uk. A mugs game if you ask me

[gerpies]

yes, what is to stop them from always outbidding everyone with their own (automated) dummy bidders?