Seller's market

From: Sellam Ismail <>
Date: Sun Mar 21 12:58:52 1999

On Sun, 21 Mar 1999, Barry A. Watzman wrote:

> The messages by some of the participants shows that they really do not
> understand [or perhaps do not want] the concept of a free market.

Ok, let's hear your definition then so that we know how to evaluate the
rest of your message.

> The internet is having a huge impact on buying and selling because it
> is creating the most free and perfect market that ever existed. The
> definition of such a market is that every buyer knows of every seller,
> and vice versa; the sellers are able to find the buyer willing to pay
> the highest price, AND the buyers are able to find the sellers willing
> to sell for the lowest price.

You know, if this were the case I'd have no argument. But we are talking
about ebay, not the internet at large. There is a big difference in how
stuff is priced and sold on the internet versus ebay, where price
inflation is encouraged. You first need to think about how the ebay
auction format results in higher than reasonable prices (since you seem to
have ignored all the arguments I've made to this point) and then see if
that matches your model of a "free and perfect market".

And please explain how a market can be "free and perfect" when there's an
intermediary in between the buyer and seller collecting a transaction fee
based on how high the item that the seller sells to the buyer is priced?

> That said, I do feel that steps should be taken to INSURE that bidders
> complete their deals. If I were a seller, and someone bid $5,000 and
> then backed out, I'd seriously consider legal action to enforce
> specific performance. I believe that bids on E-Bay are legally
> enforceable, but in 90% of the cases, because of both the amount and
> the fact that the buyer and seller are probably in different states,
> it is just not practical to try and enforce it. However when the bids
> get into the thousands of dollars, the situation changes and it may
> become practical to seek a court order of specific performance.

Yes, a "free and PERFECT" market.

> But, perhaps a better way would be for E-Bay to create a new class of
> "Bonded Buyers and Sellers", in which E-Bay has credit card numbers
> from both buyer and seller, and both buyer and seller have agreed to
> binding arbritration by a 3rd party [E-Bay]. A bonded seller could
> designate an auction as open only to bonded bidders, with the
> assurance on both sides that the transaction WOULD be completed and
> that items offered would be as described.

You'd still have over-bidding and inflationary mechanisms in place. No
matter what you recommend to "improve" ebay, as long as the basic auction
format they now have stays in place, as long as there is an intermediary
to encourage undue price inflation, it will remain a lopsided "free"

Barry, I know you buy a lot of stuff from eBay, and therefore must not
feel the prices are absurd. I don't know how long you've been collecting
computers, or if you even started collecting until after you discovered
ebay. But most people who have considered this their hobby for more than
at least 3 years know that what something sells for on ebay is ridiculous
compared to what its really worth.

Think of it this way: if a toy stuffed with beans that cost a couple
dollars to manufacture were to be made for sale in a way which makes
people perceive a scarcity, and that toy was then subsequently priced up
to $1000 because of dealers and price speculators feeding on the perceived
scarcity of that toy, is it really worth $1000? Don't answer that yet.
Now fast forward a couple years in time and the market runs its course,
people are fed up with this toy and don't care about it anymore. The fad
is over, the bottom of the market drops out, and the last sorry asshole to
pay $1000 for a toy stuffed with beans is left holding an item worth maybe
$50 to the person who still hasn't caught on that it was all just an
irrational frenzy to begin with.

You've been warned. :)

Sellam Alternate e-mail:
Don't rub the lamp if you don't want the genie to come out.

                  Coming in 1999: Vintage Computer Festival 3.0
                   See for details!
                        [Last web site update: 02/15/99]
Received on Sun Mar 21 1999 - 12:58:52 GMT

This archive was generated by hypermail 2.3.0 : Fri Oct 10 2014 - 23:32:21 BST