WHY DOES EBAY HIDE LOW BIDS?

[LARRYTOWN]

I recently found an item of interest on Ebay that had a starting bid of $2.99, then I entered the bid of $5. hoping that perspective bidders will turn away from that offer and look somewhere else, that way I would win, but sneaky Ebay doesn't show the bid that I listed, they continue to show the lowest starting bid, so when new bidders enter $2.99, they see the message to enter a higher bid. That way my starting bid will have to increase.They at ebay think that we will continue to have bidding wars just out of excitement, well, those days are over.

[Cupid]

Ebay has always displayed the bid amount required to win the auction... which in the case of just one bid is that opening bid amount.

Once there is more than one bid, Ebay therefore then displays the current auction price as the underbidders bid plus (at most) one bid increment.

They will, of course, immediately tell any bidder that places a bid on an auction if there is already one that is higher, in order to encourage that bidder to place another, higher, bid.

If they were to show the actual amount of all bids, as soon as they were entered, auction prices would certainly have to rise quicker, if bidders were still prepared to place even higher bids in order to win the auction. That's why live auctions (with everyone required to be present, or at least involved remotely, at the same time) work that way, they also don't tend to have a fixed end time, the auction just continues until no one else is prepared to offer an even higher bid... Ebay auctions are designed so as not to require everyone to turn up at the time of the actual sale though, and also so that you can be sure when the auction will end and the sale be complete.

It would also have a few detrimental effects; Some buyers would end up paying way more than anyone else was prepared to bid (assuming that you mean for a buyer to have to pay what was displayed)... If you wouldn't expect buyers to have to pay that amount, it would then result in buyers being able to effectively block other bidders, that were prepared to pay more than the opening price, just by that early bidder placing a ridiculously high one. That clearly wouldn't work for anyone other than that first bidder because in that case anyone that comes along later, not prepared to pay as much as that current bid, would be effectively blocked from placing any bid at all. That would not be fair to sellers that were denied having those (currently price rising), bids placed on their auctions.

The underlying reason why Ebay designed it that way is that Ebay also chose to have an interest in higher prices being achieved on auctions, by choosing a fee structure that works that way. They generally charge sellers a percentage of the sale price as part of the cost of doing business on Ebay.

If they had chosen a model where they charged buyers (not sellers) a percentage of their bid amount, you can be sure the system would work differently in terms of how much of each bid was displayed after a bidder placed their maximum bid. Interestingly, Ebay has recently chosen to change the way they collect fees for auctions listed by private sellers in the UK, so perhaps they might consider tweaking this for those auctions, in the future. With such a long legacy of Ebay auctions working as they currently do, I think that's still unlikely though.
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Mark