eBay vrs42?

From: vrs <vrs_at_msn.com>
Date: Sat Feb 12 13:36:07 2005

From: "Eric Smith" <eric_at_brouhaha.com>
> My Ford example was flawed in a sense because it is too dissimilar to
> how Ford actually does business. A better analogy would be a sale of
> a newly discovered Rembrandt painting. Suppose amongst the bidders
> are representitives of two art museums A and B. They each have put
> in bids before they each realize the others presence. Then they
> decide that rather than engaging in a bidding war, A will drop out.
> Possibly they agree that B will lend the painting (if won) to A for an
> exhibition. Or possibly not. The exact details of the arrangement
> between A and B is irrelevant, as the point is simply that the two
> bidders have reached an agreement where one drops out. Note that all
> of the bids both A and B placed were entirely legitimate bids that
> were intended to be binding. Not a single bid was placed with any
> intent to "manipulate the price".
> Would you also claim that this is unfair to the seller and the auction
> house? This actually is known to happen in the Real World (tm), and
> I've never heard anyone there complain that it is unethical, or that
> it constitutes "manipulating the price".

If, as a consequence, the Rembrandt goes for $1 (or any other rediculous
price), I would say that was clearly unfair to the seller.

> I think a big part of the problem with the interpretation of bidder
> cooperation as "manipulating the price" is that you're trying to
> claim that an action one of the bidders DOES NOT PERFORM is the
> one that is unethical. Yet all bids are voluntary; if it were to
> be otherwise, something *very* unethical must be going on.

No, it was the getting together of a monopoly consortium of the bidders that
was the problem.

Received on Sat Feb 12 2005 - 13:36:07 GMT

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