eBay vrs42?

From: Jim Battle <frustum_at_pacbell.net>
Date: Sat Feb 12 03:03:56 2005

Eric Smith wrote:

> Agreeing with another bidder that I will let them have the item as
> I don't want it as much as they do isn't "maniuplating the price"
> any more than just the act of bidding is. The bids that are placed
> are still perfectly legitimate bids, and the price is determined
> accordingly.

In a large marketplace with vigorous bidding then I'd agree with you.
If there were 100 bidders on an item and two of them talked to each
other and agreed that one would't bid, then no harm done most likely.
That is why I don't like these analogies in this thread about buying
Fords. It is a huge market with a huge number of buyers.

Although ebay is huge, the market for a specific old computer item is
usually not. zero to four bidders is very common. If two of them agree
to not get in a bidding war, then it can substantially have an effect on
the end price.

In the original case that spawned this thread, it was by a party who was
interested enough that he feared a bidding war. Bidding wars are the
sellers wet dream. Claiming that avoiding this won't affect the end
price is silly; the market in question isn't the perfect information
flow, continuous elasticity model that people use in the abstract when
talking economics. There often isn't someone else to fill the role of
the interested buyer who drops out because of collusion.

> eBay doesn't have any right to force me to bid on something I choose
> not to bid on, for any reason whatsoever.
> And if I choose not to bid on an item, I have not manipulated the
> price ofthat item. I don't want any Brittney Spears CDs, so I don't
> bid on them. I haven't manipulated the price of those.

Of course, but that isn't the situation that started this thread. if
one person with the intent to buy something is afraid he is getting in a
bidding war with another bidder and makes side communication to affect
the end price, that seems unfair to me.

Eric, I take it you buy a lot more off of ebay than you sell. Imagine
you were selling a PDP-1 on ebay. :-) Let's say it has been restored
to as-new condition and by all estimates is worth at least $50,000.
Although lots of people might admire it, most of them don't have the
money to make a serious bid. Along comes Nathan Myhvold and Marc
Andreessen to classiccmp. Both discuss what a fine machine it is, no
other like it in the world. You then follow their thread where they
flip a virtual coin to decide who gets to make a bid and who drops out.
  The auction goes and there is only one remaining serious bidder, Paul
Allen, who bids and wins for $15,000. That doesn't sound unfair to you?
  You'd just shrug your shoulders?

I've bought probably four things off ebay for every one that I've sold
(say 240 vs 60). Although people complain about ebay stacking things in
favor of the seller, it is still no picnic being a seller except for
those rare cases when there is a bidding war.
Received on Sat Feb 12 2005 - 03:03:56 GMT

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