4/10/2005

E-bay

Has anyone tried to buy something on E-bay and noticed that the item you want is always being sold by the same person? That is to say, the seller is making it or providing the selling item. People bid it way up because they think that it is the only one of its sort. Then, the next week, it is back and the beginning bid is $5. It is like the Dutch auction discussed in class and there is no consumer surplus left because it all goes to the seller.

2 comments:

heat said...

Way to go MEG! I'm a seller on Ebay, and it always drives me crazy to watch other seller's list their items so haphazardly. The thing I am most conscious of as a seller is being able to maintain demand and not to disturb the demand so it is always in my favor. Viva producer surplus!

Dr. Tufte said...

-1 on Mack's post for no link.

LOL. I think Meg and Jacques have learned something in their ManEc class.

Alternatively, remember how I said at several points earlier in the semester that economics is about trying to figure out why some unusual and seemingly sub-optimal and irrational behavior is in fact optimal and rational? This is a perfect example. Meg, Jacques, and to an extent Mack were able to figure this out. Meg and Jacques were actually able to put words on why this worked.