Diablo® III

AH Bidding Problem

Do people actually still use the A.H.? I have items in there worth millions of gold for dirt cheap. I'm talking as low as 50k and still can't sell them. Haven't made a sale in months. Figured the only ones using the A.H. were gold farmers and gold buyers.
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Sigh... I give up.

People claiming that they have a better chance at winning if they bid their 100k when it's 1 sec left or 1day left are completely failing to realize how the AH bidding system works.

I have never lost an auction when the final price was less then or equal to what I was willing to bid.
I have never won an auction when the final price was more then what I was willing to bid.
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02/27/2013 09:15 PMPosted by Wyatt Cheng
The AH was hotfixed a few weeks ago to do this. Instead of raising the current bid 5% over your attempted bid it just brings it up to yours. Blizzard changed it to help prevent other players from finding out your max bid.


This is correct. Preserving your max bid as a secret is important in allowing players to bid according to their true valuations as well as mitigating shill bids. (Bids with ill intent to artificially inflate the price)

Others in this thread have said it better than I but in essence if your desire is that you simply want to know what it is that you need to beat (so you can bid a bit higher) flip your thinking over and let the system work in your favor instead. Suppose the current winner is Bob with a visible (public) bid of 50,000 gold. Bob's true max bid (which is hidden from you), is 75,000 gold.

In this case one of the following will apply:

Scenario 1: You are willing to bid between 52,500 and 75,000 gold. In this case, you're not willing to pay as much as Bob, so Bob will win. The system will automatically increase Bob's bid to your max bid. Since he entered his bid first (and is also willing to pay more), the system considers Bob the winner.

Scenario 2: You are willing to bid 75,001 or more gold. In this case, you are willing to spend more than Bob, so the system makes you the winner. Suppose you enter a value of 150,000 gold. Well now the hidden bid is working to your advantage. The public bid is 75,000, the maximum amount Bob was willing to pay. But now you're the one who is willing to pay more, and entered a higher number, so the system considers you to be the winner instead. Even though you entered 150,000 - if the auction were to end right now you only pay 75,000, the maximum of the second place bidder (Bob). Of course somebody else may come along and bid that up, but the system will automatically increment your bid upwards for you to the maximum (150,000) you had specified.

For the academically interested, you can read more about this auction approach on wikipedia, it's called a Vickrey auction or "Second Price Auction". One very nice property is it gives bidders incentive to bid their true value. a.k.a "Truthful bidding". For the Diablo Auction House it enables players to make a truthful bid, leave the game, come back 24 hours later and see if they won. No need to babysit a bid and make sure you don't get "sniped". As long as you bid the maximum amount you were willing to pay you either win and get a refund for the difference between you and second place, or you lose the auction to somebody who was willing to pay more.


This is horseshyte to the power of 100.

If you proposed, let alone implemented this type of logic on a system I was designing I would FIRE YOU ON THE SPOT.

First of all, you are referencing the Vickrey auction system which is a SEALED BID auction. That is fundamentally different from the previous model, which is basically an eBay style auction (and worked quite well.)

No matter how good your intentions are to thwart shill bidding, the ultimate result is theft of monies from the vendors. ALL vendors that sell via auction, not buyout. As for shill bidding, is this an issue so problematic that you would #!#@%%@* the vast majority of vendors to fix in this way? Is it not a risk to those who shill bid to end up winning auctions (to their detriment) enough to alleviate most of the concern about this small "flaw". Remember, someone in that case would have bid that amount anyways.

And I say this not as a flipper, and not as a seller of any significance, just a general player who is a Business Analyst that sees an obvious logic error of immense size here.

In "solving" (very questionable) one problem, you have broken the basis of the auctoin itself.
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As for shill bidding, is this an issue so problematic that you would #!#@%%@* the vast majority of vendors to fix in this way? Is it not a risk to those who shill bid to end up winning auctions (to their detriment) enough to alleviate most of the concern about this small "flaw". Remember, someone in that case would have bid that amount anyways.

And I say this not as a flipper, and not as a seller of any significance, just a general player who is a Business Analyst that sees an obvious logic error of immense size here.

In "solving" (very questionable) one problem, you have broken the basis of the auctoin itself.


Before the change there was no risk for the shill bidder to end up winning the Auction. You could tell when you were about to exceed a person's max bid and stop bidding.

Thats why they made the change. You can no longer tell what a person's max bid is so now there is a risk for a shill bidder to win the auction.
Edited by Rapap#1672 on 3/1/2013 4:01 PM PST
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You are mistaken.

Yes, there was (a risk to the supposed "shill bidder"). You could win auction because you outbid the last person and no one bid higher. Once you hit the "bid zone" you have essentially a 50% chance to either find that you have just under bid the former bidder (and can see their highest bid), or you over bid them.

i.e. someone has a highest bid of 105,001 for an item. Current bid is 100,000. You bid that as a shill. it responds that you are outbid and current bid is 105,000. Now if you select the next bid, it is 110,250, you are the leader, and potentially winner. This "shill bid" did nothing to tell you that you were approaching the max bid of the previous bidder.

Again, this change is absolute horseshyte, and I will debate anyone including Wyatt Derp about it.
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You are mistaken.

Yes, there was (a risk to the supposed "shill bidder"). You could win auction because you outbid the last person and no one bid higher. Once you hit the "bid zone" you have essentially a 50% chance to either find that you have just under bid the former bidder (and can see their highest bid), or you over bid them.

i.e. someone has a highest bid of 105,001 for an item. Current bid is 100,000. You bid that as a shill. it responds that you are outbid and current bid is 105,000. Now if you select the next bid, it is 110,250, you are the leader, and potentially winner. This "shill bid" did nothing to tell you that you were approaching the max bid of the previous bidder.

Again, this change is absolute horseshyte, and I will debate anyone including Wyatt Derp about it.


You don't have the balls, or the free time.
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[quote]You don't have the balls, or the free time.


You are mistaken on both counts.
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Dear Wyatt Cheng: I just wanted to tell you face to face with all respect that I HATE WITH ALL MY HEART what you guys have done/still are doing with my beloved Diablo.
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You are mistaken.
...
i.e. someone has a highest bid of 105,001 for an item. Current bid is 100,000. You bid that as a shill. it responds that you are outbid and current bid is 105,000. Now if you select the next bid, it is 110,250, you are the leader, and potentially winner. This "shill bid" did nothing to tell you that you were approaching the max bid of the previous bidder.

Again, this change is absolute horseshyte, and I will debate anyone including Wyatt Derp about it.


Except ofc that if the shillbidder had a buddy (or just 2 accounts) which just bids 2,5% (then you bid, before refreshing) right after you made each 5% raise, so he could tell you if you where about to cross the limit.

I love hidden bids. No need to pay more that what people are willing to pay for the item, as it should be ^^
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blizzard could just take 5% of any bid automatically they would stop idiots from troll bidding they're items higher cause they would loose 5% right of the get and items shouldn't be worth thousands of USD anywayz $$$$$$ some of these prices are rediculous ----- and this would definately create a shallower market all together
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would also make people really weigh wether or not they want to bid on a specific item or just the minimum bid atleast
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5% may or may not be a suitable amount was just giving a example
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The AH was hotfixed a few weeks ago to do this. Instead of raising the current bid 5% over your attempted bid it just brings it up to yours. Blizzard changed it to help prevent other players from finding out your max bid.


This is correct. Preserving your max bid as a secret is important in allowing players to bid according to their true valuations as well as mitigating shill bids. (Bids with ill intent to artificially inflate the price)

Others in this thread have said it better than I but in essence if your desire is that you simply want to know what it is that you need to beat (so you can bid a bit higher) flip your thinking over and let the system work in your favor instead. Suppose the current winner is Bob with a visible (public) bid of 50,000 gold. Bob's true max bid (which is hidden from you), is 75,000 gold.

In this case one of the following will apply:

Scenario 1: You are willing to bid between 52,500 and 75,000 gold. In this case, you're not willing to pay as much as Bob, so Bob will win. The system will automatically increase Bob's bid to your max bid. Since he entered his bid first (and is also willing to pay more), the system considers Bob the winner.

Scenario 2: You are willing to bid 75,001 or more gold. In this case, you are willing to spend more than Bob, so the system makes you the winner. Suppose you enter a value of 150,000 gold. Well now the hidden bid is working to your advantage. The public bid is 75,000, the maximum amount Bob was willing to pay. But now you're the one who is willing to pay more, and entered a higher number, so the system considers you to be the winner instead. Even though you entered 150,000 - if the auction were to end right now you only pay 75,000, the maximum of the second place bidder (Bob). Of course somebody else may come along and bid that up, but the system will automatically increment your bid upwards for you to the maximum (150,000) you had specified.

For the academically interested, you can read more about this auction approach on wikipedia, it's called a Vickrey auction or "Second Price Auction". One very nice property is it gives bidders incentive to bid their true value. a.k.a "Truthful bidding". For the Diablo Auction House it enables players to make a truthful bid, leave the game, come back 24 hours later and see if they won. No need to babysit a bid and make sure you don't get "sniped". As long as you bid the maximum amount you were willing to pay you either win and get a refund for the difference between you and second place, or you lose the auction to somebody who was willing to pay more.


They teach this in game theory, and sorry Wyatt, you need to be schooled on this one :(

A true Vickrey auction has two pre-requisites in order to actualize "truthful bidding" -
* Sealed bids (strong pre-requisite)
* No re-bidding (weak pre-requisite)

This is done in order to make each bid as *independent* as possible.

But D3's implementation is inconsistent with these.

* The 2nd highest bid is disclosed as the current bid (this information can be exploited)
* Re-bidding is allowed (implement the exploit, see below how)
* Participating increases the 2nd highest bid

And it is for these reasons why D3 bidders naturally *shade* and *strategize* their bids despite these being what Vickrey try to prevent in the first place.

Truthful bidding leaves no room for shading and strategy.

Vickrey assumes that bidders have *perfect* information about the economy, which is contrary to the D3 economy (and host of others too), hence, the need to provide an initial valuation.

Which is why D3's bid system starts with open-ascending auction (with disclosed initial bid, and disclosed succeeding 2nd winning bids) then oddly becomes Vickrey when declaring the winner.

What you may call "illogical behaviour of D3 bidders" is a result of the inconsistency in the implementation, and Vickrey's theory already showed that knowing the 2nd highest bid naturally results to shading, and the more participants there are the narrower the gap between highest and 2nd highest bid.

The revenue between open-ascending autction and Vickrey are actually the same, but the former is commonly adopted since it recognizes that not everyone has *perfect* information.

----

In a true Vickry auction, I will bid as *truthful* as possible since I'm only given an opportunity to bid once and I don't know how much others are bidding.

In D3, I know the 2nd highest one minute prior to the close.

If I was willing to pay 200m in a true Vickry auction, knowing the 2nd highest bid has now affected my willingness to pay 200m because now I have a better sense of what true market value is, and if the item is not as valuable as I thought it was, why should I bid as much?

And because I know the distribution of prices above which Vickrey prices are decided (and this is almost close to flat with large number of bidders. And number of bidders can be estimated from the frequency of price changes), I can assign a win probability to my final bid as function of the bid price. D3 bidders even without knowledge of the theory, do this intuitively.

Now maybe I have 96% probability of winning if I bid 100m instead.
There maybe a 4% who can outbid me, but I'm happy with 96%.

I'll be more than happy to show you how Nash equilibrium applies here ;)

Yet so what? The system works after all.

But this is one of the clear examples of how intent and principles of design are very different from implementation, and as a gamer, that scares me.
Edited by babyliyi#6905 on 3/2/2013 3:11 AM PST
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02/27/2013 08:03 PMPosted by SmokeyBuddha
How is it that people STILL do not understand how this works? Just because you bid higher than the CURRENT winning bid doesn't mean you will be the higher bidder. That person ALREADY bid HIGHER than you just bid. CURRENT price is NOT the highest that someone else has bid.


Its not that ppl don't understand it, its because its not explained anywhere on the auction house tab.
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03/02/2013 02:07 AMPosted by Saberfenix
But D3's implementation is inconsistent with these.* The 2nd highest bid is disclosed as the current bid (this information can be exploited)* Re-bidding is allowed (implement the exploit, see below how)* Participating increases the 2nd highest bid


so what if rebidding is allowed? if you rebidded obviouslly you didnt put in 'the maximum amount you were willing to pay in the first place'

In D3, I know the 2nd highest one minute prior to the close.If I was willing to pay 200m in a true Vickry auction, knowing the 2nd highest bid has now affected my willingness to pay 200m.


''your willingness to pay 200mil'' you say...but its not like you are going to lose that 200 mil. you will get it back because it wasnt high enough. regardless of whether you know the second highest bid or not your 200 mil would have lost anyway. so how exactly does this change anything?


There are now 4 kinds of D3 players -

* Traditional Non-RMAH players
* RMAH players
* AH vendors
* Botters

One of them have very little gold and when purchasing items at AH, would naturally want to part with the least amount of game currency.

The other players will naturally find this behaviour funny since as you put it, why not just put your highest bid, end of story.

But majority of the bids occur at items that are undervalued to begin with. The rest (high-end) are BOT-generated markets that most players have no opportunity to participate on.

When a normal player competes with gold-rich botters in a bid, the risk of overpaying is higher since the latter has no sensitivity to valuation (they can pay at any price).

Which is why this problem is always intertwined with gold botting.

I didn't say I was against the current system.

However, when Blizzard design these kinds of systems, they ASSUME that they will smoothly follow normal economic models. But when things like botting arise, they treat it as an isolated problem that has no effect on their *models* and wonder why people complain.

But how do you compete fairly in bids if you know that the rest are not following the same rules?

The strategy that you and Wyatt talks about do not work for traditional players....because more often than not when competing with botters, they will end up either losing or overpaying. With botters, dont talk about bidding with fair market value.

Most of botters snipe UNTIL THEY WIN....they don't have a sense of what is fair market value.
Even if an item is valued at 200m five minutes before bid close, do you really think that a 400m counter bid from someone like me will guarantee a win?

Botters (because they average 12Billion gold every month according to bot forums), don't care about the 400m, and will counter snipe UNTIL THEY WIN.

And like I said - this is not how Vickrey auction works, where you are only allowed to bid once based on what you think is fair market value.

For Wyatt to call D3 AH a Vickrey is completely false.

And judging by the threads in this forum, gold spammers are on the rise.
Edited by babyliyi#6905 on 3/2/2013 3:08 AM PST
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02/28/2013 06:49 PMPosted by Yiriba
How could they (fake bidders) stop 'when max bid is found' WITHOUT risking exceeding it?


Since the system has now changed, as discussed in this thread, and thus there's no risk of it being exploited anymore:

Shill bids minimum allowed bid. If current bid increases by 5%, there's still headroom, keeps bidding. Once the current bid increases by less than 5% is when they've caused the bidder to hit their max, so stop bidding against them.

So there was risk with the initial scouting bid, but that's when the price was low to begin with. Any time after that, there was no risk of accidentally exceeding the max bid, because the shill knew what the next minimum bid should be by the formula.

As for the other argument... It's best to keep in mind that the AH in Diablo III is deliberately not the most efficient system of matching buyers and sellers. It's intended to be something that people can "play". Games are fundamentally about unnecessary challenges and inefficiencies, creating problems for the player to solve. If they wanted it to be more efficient, they could easily do so -- they could have just let you specify exactly what you wanted, and given it to you. They could make it so that only items you can use drop, or even only items that are an upgrade for you, but instead chose to not only give players a reason to trade, but to implement a system of trading that is itself a game.
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Now maybe I have 96% probability of winning if I bid 100m instead.
There maybe a 4% who can outbid me, but I'm happy with 96%.


Except ofc in a real auction you DON'T GET YOUR OVERBID BACK... which you DO IN DIABLO 3!

So there is 0% risk of paying to much as long as you bid what you are willing to pay...

If an item is worth 200m to YOU and you bid 100m... you are just hurting yourself. Cause if you win the item for 100m or less you got lucky, if you lose the item for anything between 100m and 200m you just lost an item you thought was worth 200m, if you lose for anything over 200m well then someone else valued it higher then you.

Sure, knowing what other have bid on an item (so far) might affect your evaluation of the item and it's market value... but so will actually looking up similar items and checking their values and bids. As you said it's dependent on correct information.

But this is a mute point, as there is 0% chance you can "overbid" on something, provided you bid what you are willing to pay.

As for all of Diablo 3 item's and their worth:
An item is worth what someone is willing to pay for it!
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Now maybe I have 96% probability of winning if I bid 100m instead.
There maybe a 4% who can outbid me, but I'm happy with 96%.


As for all of Diablo 3 item's and their worth:
An item is worth what someone is willing to pay for it!


This in principle, and just like Blizzard, fails to account for reality.

I would have agreed with you if not for the bots who dominated this game and had exlcusive reign over the AH.

With license to print money, bots have no sensitivity to price valuation and are willing to pay at any price...this throws your sense of what true market value is.

It's already common knowledge that bots caused the early massive inflation to their favour. If inflation occured naturally due to fair competition within the system, I would have agreed with you, because people will then be willing to pay for an item's true worth.

But then some people were *given* license to print money....I'm still curious how you successfully bid against them?
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