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Snipers, Shills, and Sharks: eBay and Human Behavior

Ken Steiglitz
Publisher: 
Princeton University Press
Publication Date: 
2007
Number of Pages: 
298
Format: 
Hardcover
Price: 
29.95
ISBN: 
9780691127132
Category: 
General
[Reviewed by
Sarah Boslaugh
, on
04/29/2007
]

Auctions are an ancient method of arriving at the sale price for merchandise, and are particularly good for items or collections of items whose market value is uncertain, such as works of art, celebrity memorabilia, or the contents of an estate. Auction houses such as Christie’s and Sotheby’s are part of our contemporary cultural landscape (who could forget the scene from North by Northwest in which Cary Grant conspires to get himself arrested at an art auction?), but auction principles are used in many other situations as well. For instance, when you solicit bids from competing craftsmen to do work on your house, you are engaging in a reverse auction, in which many sellers compete for the attention of one buyer.

However, the most common type of auction encountered by the average person today is the internet auction, of which the best-known is eBay. Millions of people buy and sell goods on eBay, and as would be expected in any complex series of economic transactions, their behavior is a mix of the rational and the irrational. On the one hand you have people setting true values and maximizing their surplus, and on the other you have people competing with each other or otherwise getting emotionally involved in the process and working against their own economic interests. Add to the mix common misunderstandings about how eBay works, outright fraud, and the many gray areas in which buyers and sellers attempt to manipulate the system for their own advantage without necessarily stepping across the line which separates moral and legal behaviors from their less sterling counterparts, and eBay auctions provide a fascinating opportunity to study human economic behavior.

Snipers, Shills & Sharks began as notes for a course in auction behavior: besides discussing the behavior of eBay users, it covers the history of auctions and discusses the major theories and experimental evidence about why people behave, economically, as they do. Each chapter is followed by a set of questions and exercises. The theoretical basis of auction theory, in a presentation assuming no more than freshman calculus, are covered in three appendices totaling 74 pages. A fourth appendix summarizes laboratory evidence about auction behavior. However, the main section of the text stands on its own, is eminently readable and requires no background in either economics or mathematics. General readers interested in either behavioral economics in general, or auction behavior in particular, will find Snipers, Shills & Sharks to be an entertaining and informative read. Naïve users of eBay will find it particularly useful since, as Steiglitz points out, many otherwise well-educated and informed people do not truly understand how the system works.

In case you were wondering, a sniper is someone who, usually with the use of specialized software, places a winning bid on an eBay item at the very last moment, deliberately depriving other potential buyers of the chance to raise their bids. A shill is someone who places bids, without the intent to buy, in order to raise the price of an item. Shilling is an ancient practice with numerous variations and a new twist since, in the wonderful world of internet auctions, the shill and the seller can be one and the same person using two different electronic identities.

Ken Steiglitz is Professor of Computer Science at Princeton University and is the author of three previous books: Introduction to Discrete Systems (Wiley, 1974), Combinatorial Optimization: Algorithms and Complexity (with C.H. Papadimitriou; Prentice-Hall, 1982), and A DSP Primer, with Applications to Digital Audio and Computer Music (Prentice-Hall, 1996). He is also a collector of ancient coins, which has provided him with first-hand experience in several types of auctions, including eBay.


Sarah Boslaugh (seb5632@bjc.org) is a Performance Review Analyst for BJC HealthCare and an Adjunct Instructor in the Washington University School of Medicine, both in St. Louis, MO. Her books include An Intermediate Guide to SPSS Programming: Using Syntax for Data Management (Sage, 2004), Secondary Data Sources for Public Health: A Practical Guide (Cambridge, 2007), and Statistics in a Nutshell (O'Reilly, forthcoming), and she is Editor-in-Chief of The Encyclopedia of Epidemiology (Sage, forthcoming).

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