Snipers, Shills, and Sharks

Michael Giberson

I've just finished Ken Steiglitz's book, Snipers, Shills, and Sharks: eBay and Human Behavior. Don't let the subtitle throw you - the book is neither narrowly limited to eBay nor broadly focused on human behavior. Instead, the book is the best-writted introduction to auction theory I've seen.

Steiglitz is a Princeton University computer scientist with an apparent deep and long-lasting passion for collecting ancient coins. His passion took him into dealer mail-bid auctions, and when the auction action moved to eBay in the late 1990s he became an avid student of its workings. Steiglitz knows his stuff. He has produced academic research on auctions, written on combinatorial optimization, and other computer-sciencey things. Fortunately, all that technical know-how doesn't get in the way of his telling a good story.

He uses eBay as a starting point and context for much of his discussion, and expertly links to developments in auction theory as he tells his tales. In the course of the book we get introduced to first-price and second price auctions, open outcry vs. sealed bid, why buyers should snipe on eBay though sellers do better if buyers bid early, setting public reserves vs. secret reserves, common value auctions and the winner's curse, and much more. The book seamlessly blends lessons from laboratory experiments and field experiments and purer theory to complement Steiglitz's close observations. Despite covering so much ground, Steiglitz does not overwhelm the reader. The math and basic theoretical development is limited to the appendices. Steiglitz cites to the relevant literature without studding the text with distracting lists of irrelevant names.

The book would make an excellent introduction to auction theory for undergraduates, but can also be read profitably by anyone with an avid interest in the workings of auctions.