Proxy Bidding Example
Many people are familiar with proxy bidding from websites such as eBay which use it in their auctions. See Proxy Bidding for setup and Proxy Bidding Rules to learn more about its rules and limitations.
Placing a Proxy Bid
When a bidder is placing a bid for an online item, either directly on the website or in Kiosk Mode, they have the option to make the bid as an automatic proxy bid.
In this example, the item does not have a current bid, but the starting bid for the cruise is $2,000.
The bidder is willing to bid up to $4,000 to win the item, but would clearly prefer to pay less than that if possible.
In a traditional silent auction, they would start their bidding at $2,000 and then periodically check to see if they have been outbid by someone else.
They could still do that in this case, but since they know they are willing to go up to $4,000 they choose to place a proxy bid for that amount instead.
They enter the full amount on the page and click the blue Bid! button.
The confirmation dialog shows that they are now placing a proxy bid.
The feedback for the bid shows that they are currently the high bidder with a bid of $2,000 but that their bid will be raised to $4,000 if necessary
Please note, the information about the proxy bid is only included because they are the high bidder, any other bidder viewing the page won't see that information.
Another bidder sees the page and decides to place a bid for $2,500 on the item.
This bid will not succeed however. It was below the $4,000 proxy bid in place for the item (even though the second bidder couldn't see that).
The system will raise the first bidder's bid up to $2,500 and so the new minimum bid for the item becomes $2,600.
When the first bidder looks at their My Account page they will see the current high bid for the item.
The proxy bid amount is only seen by the bidder. It cannot be seen from the dashboard.
Not wanting to lose out, the second bidder decides they are willing to go up to $4,500 for the item, and so place that as a proxy bid.
This bid succeeds because it is above the $4,000 bid placed by the first bidder. The second bidder's bid is now at $4,100 which was the minimum needed to beat the $4,000 bid.