Measuring the Benefits to Sniping on eBay: Evidence from a Field Experiment

Bidders on eBay frequently engage in sniping: submitting a bid seconds before the end of the auction. In this paper, we use a field experiment to measure the size of the benefit obtained by a bidder who snipes rather than bidding early. Previous research by Roth and Ockenfels (2002) documents the extent of this sniping. We identified pairs of identical items sold by the same seller and ending near the same time. In half the auctions, we submitted our maximum bid several days before the end of the auction, and in the other half, we submitted the same bid just 10 seconds before the end of the auction, using automated sniping software. Items included Playstation 2 games, movie DVDs, coin proof sets, Xbox games, die cast Hot Wheels cars, and Game Boy Advance games. Our results, from a set of 70 pairs of items, indicate no benefit to sniping. We found evidence of 2.54% lower prices for the sniped auction, but we did not find this benefit to be statistically significant. 1 Sean Gray may be contacted at [email protected], and David Reiley may be reached at [email protected].