Comment Re:Reserve Not Yet Met (Score 1) 556
I can't believe you got modded Insightful. Do you really not understand how commerce works?
If you really mean this as an example of being cheated, I'd suggest that perhaps you could modify your bid strategy to not include bidding $100 for something worth $50.
There is no intrinsic value of goods on eBay. That's the point- the sale price is whatever the buyer wishes to pay for it. Some people pay large sums of money for worthless crap.
The reason why shill bidding is a problem is because there is no other legitimate bidder driving up the price. Shill bidding means that the buyer can raise the price at will if they don't think your bid is high enough. This is a problem because the premise of eBay and other auctions is that the buyers collectively determine the price through fair bidding and the seller must accept the price offered by the buyer at the end of the auction period. The price is determined by TIME and the MARKET, not the seller's choice.
When an auction is fair, the risk is balanced between the seller and buyer:
Seller: may not get the highest price possible.
Buyer: may be outbid by another purchaser.
Shilling completely removes the seller risk. Even worse, the buyer is not aware that the seller has no risk! What's the Slashdot solution? Tell the buyer your maximum price.
I can see why you guys are programmers instead of economists. I want to open a car dealership in Silicon Valley if the bidding strategy there is to tell the salesman the absolute maximum you are willing to pay right off the bat. I'll be able to retire in six months.
Not defending shill bidders, don't get me wrong, I'm just saying do your research of what something is worth before you set the number, _or_, overbid and know you're going to be highest. But don't complain about it if you use the latter approach
No, no, no, no, no.
You are talking about a fixed price market. In that case it is a "pay my price or leave it" situation. People are not overpaying for goods on eBay in the sense of paying $5.00 for a Hershey Bar. They are being ripped off in that the seller is not supposed to be able to set the price other than a reserve set at the opening, and the sellers are constantly raising the price throughout the life of the auction.
To wit:
B: How much is a Hershey bar?
S: I will accept any price over 50 cents. (a reserve)
B: OK, I will pay 55 cents. (a bid)
S: Hold on....my invisible friend will pay 65 cents. (a shill bid)
B: Oh. In that case, 75 cents. (a bid)
S: Wellll...maybe you should offer 80 cents. (price fixing via shill bid)
B: Hmm. I am willing to pay up to a dollar. (maximum bid)
S: What a coincidence! My invisible friend will only go up to 99 cents. (shill bid)
What's the real price of the Hershey bar? If the seller sets the price, a dollar. But the buyer would set a price of 55 cents.
Auctions let buyers set the price through fair negotiation.
If you really mean this as an example of being cheated, I'd suggest that perhaps you could modify your bid strategy to not include bidding $100 for something worth $50.
There is no intrinsic value of goods on eBay. That's the point- the sale price is whatever the buyer wishes to pay for it. Some people pay large sums of money for worthless crap.
The reason why shill bidding is a problem is because there is no other legitimate bidder driving up the price. Shill bidding means that the buyer can raise the price at will if they don't think your bid is high enough. This is a problem because the premise of eBay and other auctions is that the buyers collectively determine the price through fair bidding and the seller must accept the price offered by the buyer at the end of the auction period. The price is determined by TIME and the MARKET, not the seller's choice.
When an auction is fair, the risk is balanced between the seller and buyer:
Seller: may not get the highest price possible.
Buyer: may be outbid by another purchaser.
Shilling completely removes the seller risk. Even worse, the buyer is not aware that the seller has no risk! What's the Slashdot solution? Tell the buyer your maximum price.
I can see why you guys are programmers instead of economists. I want to open a car dealership in Silicon Valley if the bidding strategy there is to tell the salesman the absolute maximum you are willing to pay right off the bat. I'll be able to retire in six months.
Not defending shill bidders, don't get me wrong, I'm just saying do your research of what something is worth before you set the number, _or_, overbid and know you're going to be highest. But don't complain about it if you use the latter approach
No, no, no, no, no.
You are talking about a fixed price market. In that case it is a "pay my price or leave it" situation. People are not overpaying for goods on eBay in the sense of paying $5.00 for a Hershey Bar. They are being ripped off in that the seller is not supposed to be able to set the price other than a reserve set at the opening, and the sellers are constantly raising the price throughout the life of the auction.
To wit:
B: How much is a Hershey bar?
S: I will accept any price over 50 cents. (a reserve)
B: OK, I will pay 55 cents. (a bid)
S: Hold on....my invisible friend will pay 65 cents. (a shill bid)
B: Oh. In that case, 75 cents. (a bid)
S: Wellll...maybe you should offer 80 cents. (price fixing via shill bid)
B: Hmm. I am willing to pay up to a dollar. (maximum bid)
S: What a coincidence! My invisible friend will only go up to 99 cents. (shill bid)
What's the real price of the Hershey bar? If the seller sets the price, a dollar. But the buyer would set a price of 55 cents.
Auctions let buyers set the price through fair negotiation.
