I have participated in voice auctions for significant sums. I get the impression that the pre-committed maximal price that people think is maximal is often not actually maximal- i.e., even with proxy bidding systems people will bid multiple times on an object, and while the price is climbing many people will alter their impression of how much they’re actually willing to bid. Jumping makes the value recalculation more explicit, and can drop some people who will climb a gentle slope past where they would want to go.
It also seems like people read a large number of signals in real-world auctions; tone of voice, time before bidding, and amount raised. Immediately following someone else’s bid appears to be a better signal than making large jumps. That said, jumping immediately after someone else’s bid appears to be more effective at ending auctions than incremental raises.
The trouble is determining whether that additional effectiveness is worth the cost, as you can jump far past what the other person is willing to spend. I only have anecdotal evidence, and the two that come to mind both make me look good, so take them with a grain of salt. I once followed someone else’s $500 raise with a $50 raise, and won because their large bid was their final bid. Similarly, someone else once followed my $100 raise with a $600 raise, but if they had continued with incremental $100 bids I would have stopped after another round, saving them $300.
There’s also the issue of plants- sometimes, the seller of an object will have a friend in the audience who will try to raise the price. They don’t want to win the auction, just increase the price- and so if you double-jump, that can be a signal of a final bid, and the plant may be more reluctant to continue, as that might be close to your final bid.
(That is, “let’s clear out the unserious bidders” and “I’m all in” are different messages that someone would want to send, and people will try to make the second sound like the first. Regardless of what your opponent is doing, you should always bid so long as the price isn’t over the opportunity cost for you, but modeling your opponent appropriately will help you decide how much to raise by. Lower amounts are often but not always better.)
I have participated in voice auctions for significant sums. I get the impression that the pre-committed maximal price that people think is maximal is often not actually maximal- i.e., even with proxy bidding systems people will bid multiple times on an object, and while the price is climbing many people will alter their impression of how much they’re actually willing to bid. Jumping makes the value recalculation more explicit, and can drop some people who will climb a gentle slope past where they would want to go.
It also seems like people read a large number of signals in real-world auctions; tone of voice, time before bidding, and amount raised. Immediately following someone else’s bid appears to be a better signal than making large jumps. That said, jumping immediately after someone else’s bid appears to be more effective at ending auctions than incremental raises.
The trouble is determining whether that additional effectiveness is worth the cost, as you can jump far past what the other person is willing to spend. I only have anecdotal evidence, and the two that come to mind both make me look good, so take them with a grain of salt. I once followed someone else’s $500 raise with a $50 raise, and won because their large bid was their final bid. Similarly, someone else once followed my $100 raise with a $600 raise, but if they had continued with incremental $100 bids I would have stopped after another round, saving them $300.
There’s also the issue of plants- sometimes, the seller of an object will have a friend in the audience who will try to raise the price. They don’t want to win the auction, just increase the price- and so if you double-jump, that can be a signal of a final bid, and the plant may be more reluctant to continue, as that might be close to your final bid.
(That is, “let’s clear out the unserious bidders” and “I’m all in” are different messages that someone would want to send, and people will try to make the second sound like the first. Regardless of what your opponent is doing, you should always bid so long as the price isn’t over the opportunity cost for you, but modeling your opponent appropriately will help you decide how much to raise by. Lower amounts are often but not always better.)
Out of curiosity, what were you bidding on?
Paintings.