eBay 'Sniping' and the Power Law
According to an article (June 23, 2006) in the New Scientist, two South Korean physicists, Byungnam Kahng and Inchang Yang, found that a power law equation explained the observed patterns in eBay auction bidding. The power law reflects the fact that most of the bidding for items tend to take place near the end of an auction. Thus, according to their article in Physical Review E (vol. 73, p 067101, 2006), 'sniping' is a rational strategy to employ in eBay bidding.
This research builds on the work of experimental economist / game theorist, Alvin Roth. His article in the American Economic Review (vol 92, p 1093, 2002) came to similar conclusions.