We finish by demonstrating how an understanding of economic market mechanisms, through the introduction of news auctions rules, can help avoid this precipice.Д¬onsider the auction rules of eBay, the single largest online auction house. We illustrate conditions where such agents could lower economic efficiency, promote collusive bidding, and ultimately push electronic auctions towards a precipice. We discuss the mechanics of current bidding technology on eBay, compare the architecture of two relatively more sophisticated third-party bidding agents, and report on a field experiment that deployed one of these agents on eBay. This field deals with incentives and how they can be aligned to practically implement good systemic solutions to problems involving several self-interested economic agents. This position is substantiated through the use of common terminology in the subfield of micro-economics called mechanism design. We predict that an emerging technological force, in the form of ubiquitous open-source smarter bidding agents, is likely to have a significant influence on their future practice. In this article we take a critical look at the mechanism design choices the auctioneers have made. They attract legions of buyers and sellers and have evolved from a bare-bones architecture designed solely to match buyers and sellers to a sophisticated virtual marketplace with value-added services such as feedback mechanisms, payment processing, and escrow services. Online auction houses such as eBay, and to an extent Ubid, have become household names in today's networked economy.

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