So you’re bidding on a $1.25 price cut and the next highest offer is $2.50. You’re wondering how much you’re going to pay.
This is a pretty common question, but the best way to figure this out is to look at how much you will cost to win. If you bid $2 for a click on the 1.25 offer, you will pay $1.25 + your bid. So the next highest bid is 2.50, so you pay $1.25 + 2.50 = $2.
Now if I were to ask you for a price cut of 3.5, you would bid 3.50. So you would pay 3.50 3.50 3.
The next higher bid, 3.75, is bid higher because you would pay 3.75 3.75 3.75. So the next highest offer is 4.00, so you pay 4.00 4.00 4. Now if I were to ask you for a price cut of 6.00, you would bid 6.00. So you pay 6.00 6.00 6.Now if I were to ask you for a price cut of 12.
Some people may think that if you bid 12.01 and this particular bid is a higher one, you are being greedy. In fact, you are very likely being greedy. You are bidding at the bottom of the market because you are betting that the price you are bidding really is a lower one. This is a very bad idea. The next highest bid will be 13.01. So you bid 13.01 and this bid is a higher one.
So your next highest bid is actually 13.01 and you actually bid 12.01 and the next bid is actually 11.01. So bidding 12.01 is a bad idea in the long run. It’s just a bad idea because the higher bid is not a lower one. It is a higher one. The next highest bid is actually 11.01 and you actually bid 9.01. What you think you’re doing is bidding 9.01.
Exactly. And then the next bid is actually 9.01 and you actually bid 8.01. And then you think you’re bidding 8.01 but the next bid is actually 7.01. And then you think you’re bidding 7.01 but the next bid is actually 6.01 and you actually bid 5.01. And then you think you’re bidding 5.01 but the next bid is actually 4.01. And then you think you’re bidding 4.
You got an idea.
I like the way the $5.01 auction actually ends. In this case, it’s the highest bid by the time the auction ends, so if you bid $2, the next highest bid is $1.25. But if you actually bid $1.25, the next highest bid is $1.19, and this time the bidding stops. Even though your next bid is still $1.25, you’re losing money. The reason you think you’re bidding $1.