Does it pay to snipe on eBay?

Apparently so.

To test whether sniping is a smart way to do things or just truncates normal bidding, the South Korean team at Seoul National University produced a "master equation" for how bidding proceeds (it's:

nk(t+1) — nk(t) = w(k-1)(t)*n(k-1)(t) — wk(t)*nk(t) + sigma(k,1)*u(t),

if you really want to know), and then tested it against a massive number of auction records, some 264,073 items sold in one day on eBay and another 287,018 items sold in one year by eBay's Korean partner.

Plugging all those data into the model and testing the outcome in terms of how the auctions turned out, the team found that the probability of submitting a winning bid on an item indeed drops with each bid. "Our analysis explicitly shows that the winning strategy is to bid at the last moment as the first attempt rather than incremental bidding from the start." The study appears in the current Physical Review E journal.

I wonder if they considered Thaler's "Winner's Curse?"