A typical example for the biggest problem with online auctions is the WoW (World of Warcraft) auction system. Let’s see the problem:
You are on lvl 55. You want a new sword, so you go to AH, enter the filter, and get two result: both of them are the same Supershiny Antigoblin Bastard Sword. The minimum bid for the first one is 5 gold, there is no buyout value entered and the listing ends 5 days from now. The other one has a minimum bid of 10 gold, a buyout value of 30, and the listing ends 3 days from now. Which one will you buy?
The second one, of course, and you will choose the buyout option. Usually, what you see is that 90% of the items will be bought out, while the items without a buyout price will be sold on much lower prices. Why is that?
Mainly because you need the sword NOW. Not in 3 days, not in 5, but now. You do care about the money, and it hurts you to spend 30 gold instead of 5, but waiting for 5 days for a sword is just not an option.
On the other hand, if you create a listing, you have to decide again. First, you want to get a good price for it. Second, sometimes you just cannot be sure about what is the actual value of an item. Also, you would like to have it listed for as long as it is possible, because sometimes it takes 5 days to find a guy who want to buy a specific item, like orange scented socks, but having a long listing time is counterproductive, because people will not bid on it, for they want the item “now”.
The solution is simple: instead of just specifying the listing time, the user should be able to specify the “bidding time” to.
How does this work: The listing time is actually the maximum listing time for an item. If there is no bid in that period of time, the listing will end. Typical listing times can be somewhere between 1 day to 1 month.
But, if there is a bid on the item, we switch to the “bidding time” counter. That means that other users will have that amount of time to put a better bid on the item. If they don’t, the last bid wins the item. If they do, the counter resets, and the time is ticking down again from the “bidding time”. Typical bidding time should be somewhere between a few minutes to a few hours.
Example: you list an item with 1 day as listing time, and 1 hour as bidding time. 5 hours later you get a bid. The counter starts to count down from one hour. 36 minutes later you get another bid. The counter resets to one hour, and starts to count down. There are no other bids now, so the last bidder wins the item. From the point of listing it took 6 hours and 36 minutes to sell the item.
Of course, there is a theoretical case when bidding will never end, but frankly I doubt that it will ever happen, especially if there is a secondary system in place, similar to Ebay-s “maximum bid” functionality. Also, I can imagine that the user will not always get the best price, especially if the bidding time is set to some small value. Still, I think this system would make bidding a valid option again.