eBay vrs42? (grand finale)

From: Jim Battle <frustum_at_pacbell.net>
Date: Sun Feb 13 03:06:07 2005

Doc Shipley wrote:

> OK, here's my take.
> The fact that DW was asking "in-house", so to speak, about the other
> bidder seems perfectly acceptable to me. Maybe I'm rationalizing, but
> in my estimation there's a huge difference between these two actions:
> A) looking up an unknown opposing bidder and emailing a complete
> stranger with an offer to negotiate out of a bidding war.
> B) Realizing that an opposing bidder is or may be someone with whom I
> already have correspondence or contact, and using *that previous avenue*
> of contact to negotiate a reduction of collateral damage.
> The first is distasteful, if not unethical, and certainly would be
> interpreted by eBay as a AUP violation.

Doc, case (A) is exactly what was going on. Two people were bidding on
an item on ebay. The first party knows nothing about the second party
other than his ebay handle. Taking a shot at it, he asks the list if
any of them know how to contact that person.

In another message you said:

> If I and Sellam agree that your item is worth 80 American cents,
> and we collude to pay only that, that's not price fixing. If we
> somehow convince *all other* bidders not to outbid our 80 cents,
> *that's* price fixing.

Isn't that what was going on? There are two bidders who don't know each
other. One attempted to convince all other bidders (one in this case)
to arrange a lower top bid for an item.

> In other words, if David and Vince are the only two people
> interested in that item, in a free market they *do* have the right
> to collectively name their price. The item just doesn't have much
> value if the interest is that limited. If there are other
> interested parties, David and Vince can't exert all that much
> influence on the final selling price.

But David and Vince aren't some collective -- they are individuals.
Also, they can still have large influence on the final price if, among
the pool of interested parties, they are willing to spend the most $$.
I agree in a large market, say for apples, then collusion between two
parties has no effect. This particular market is rather small.

This is a general statement, not directly addressing any of your points,
Doc, but in the interest of cutting down on the number of messages in
this thread, here goes my grand finale!

Eric put forth one of the best arguments of this thread: what makes
shill bidding worse is that the seller (or accomplice) makes a bid with
no intent to carry through on it. One thing that dawned on me is he
actually does carry through on it if he is the high bidder. He still
has to pay the paypal fee for selling it. he might resell it later.
ignoring ethics, how is it different than a real transaction where A
sells to B and B, a few weeks later, decides he doesn't want it and
sells it on ebay to C? In the shill bidding case it is going from A to
A to C. The damage, of course, is when A sells to B at a higher price
that B would have had to otherwise.

Another point. In the real world if american airlines sets a special
fare from chicago to new york for $200 and united's management notices
it and decides to match the fare, that is competition. instead, imagine
american's management calls up united's management and says we're
thinking about lowering the price on that route; we don't want to get in
a tussle with you, so how about we agree to $200? in this case it is
collusion and is very illegal. the outcome is the same for the
consumer. from the consumer's "black box" understanding of the
situation, things are no different, so why is the first case lauded and
the second case illegal? i've read some of the arguments on this
thread as being unable to make this kind of distinction, specifically
the difference between contacting another party to try to fix a price
and deferring to another bidder, for whatever reason, unbeknownst to the

Did anybody else have to read "The Pearl" in school? I swear it was
assigned in three different years. The story is about a poor pearl
diver with a wife and infant who are barely getting by. One day he
finds the largest, most perfect pearl ever. Being a humble man, it
makes him nervous. He knows the local buyer will not give him a fair
price on it because he is a ruthless bastard who won't give him a fair
price, so he and his wife make the difficult journey into the city. All
of the buyers there, however, collude to make sure the pearl diver gets
nothing but lowball offers. Along the way he suffers innumerable
setbacks and hardships, so he makes his way back to the village and
throws the pearl back into the sea. My apologies to all who happen to
be in the middle of reading the book. :-)

Perhaps that is where it was planted in my ethics evaluator that buyer
collusion is unethical and in the long term is bad for the market. The
problem that comes up repeatedly is that where I draw the line at
collusion and you draw the line at collusion is bound to be different.

Some (not you Doc) have taken my position and moved that somewhat
arbitrary cutoff to to an extreme ("you imply that buyers must bid on
every item whether they want it or not to ensure maximum seller profit.
  that it just stupid!") to make it easy to argue against.

there is a continuum along the line between shill bidding is OK and
buyers are forced at gunpoint to bid on things the don't want. I've
learned that most people are more towards the first end than me, or
stated the other way, I'm closer to the second end of the spectrum than

To be honest, I'm amazed that more people haven't put out the "shut up
about it already" messages. This product of
     (cctech irrelevance)*(thread length)
is getting awfully big.

Signing out, but I'll be reading the rest of the thread as it comes in.
Received on Sun Feb 13 2005 - 03:06:07 GMT

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