What is a "descending price auction" and how does it work?
A descending price auction is a listing where the price slowly declines until someone buys it or the minimum price is reached.
When making a listing the seller chooses the starting price and a minimum price. The listed price is slowly lowered. At any point a buyer can purchase the video game and the listing ends.
Screenshot of auction
Benefits of a descending price auction
- Save time: No need to spend time maintaining competitive prices.
- Sell faster: Listing can end anytime. No need to wait a fixed period of time like traditional auctions.
- No more guessing: What should the discount be for "writing" on your video game? Let the market decide.
- Better prices: Auctions generally sell for less than fixed price listings.
- Get video games faster: No need to wait for an auction to end. You can buy it immediately.
Example of a descending price auction
Seller lists a video game with these prices:
Starting price: $40
Minimum price: $25
- Starting price: $40
- 2 days later: $39
- 6 days later: $37
- Someone decides to buy at $37
- Buyer pays and listing is closed
More Details About Descending Price Auctions
Can the seller choose the duration?
Not at this time. Price will decline over a 30 day period.
Won't buyers just keep waiting for lower prices and not buy?
Buyers can wait for a lower price, but they risk losing the item to another buyer. If the buyer thinks the current price is good, the optimal decision is to buy right then. Chances are another buyer will think the price is good too.
Why not use traditional auctions?
Traditional auctions with a fixed end time require you to wait to know if you win.
They can be sniped at the last minute. And they often require multiple bids.
Descending price auctions can end immediately if the buyer likes the price. They can't be sniped at the last minute. And there is no bidding required.