I am doomed. Utterly doomed.

[gerisullivan]

I just became a registered eBay user. It's my first time. Yes, of course I did so to bid on something. It's a very low-cost item. Yeah, right.

I am doomed.

I am not, however, going to increase my bid. Either I'll get it or I won't.

It's not even what I went looking for.

Of course it isn't.

Doomed. Doomed. Doomed.

I am suspiciously cheerful and confident for someone who has successfully avoided this fate for the last decade and more.

Film at 11. In the meantime, advice for an eBay neo would be very welcome. What mistakes should I endeavor to avoid? Well, beside the mistake of registering in the first place?

Comments

Auction Theory

[minnehaha.livejournal.com]

You can demonsrate that, if the market is sufficiently fluid, auctions will never be won by people who know the items' true values.

B

Re: Auction Theory

[sethb.livejournal.com]

If the market is that fluid, there's no such thing as "true value".

After N4, there was great amusement watching the price of the Pratchett book on eBay. It was still in print (first printing, even) and available from NESFA Press at the list price. Copies went for several times that, even in auctions where the description included a link to NESFA's website.

Re: Auction Theory

[minnehaha.livejournal.com]

"If the market is that fluid, there's no such thing as 'true value.'"

Not necessarily. Or, at least, there are markets where there is a pretty standard true value.

An example: oil drilling rights. People can bid what they want for the rights, but there's a true value to the drilling rights, which everyone will know after the drilling is completed. (Yeah, yeah. I'm simplifying. Work with me here.)

The point is that when people bid on a particular drilling right, they will do so by estimating the true value of the oil to be extracted. Some will estimate high, some low, and some exactly right. But the auction will always be won by the person who overestimated the most. And the person that correctly values the oil to be extracted will never win an auction.

It's a fastinating effect of auction systems, and I've seen it cause problems in computer co-processor auction systems.

B

Re: Auction Theory

[sethb.livejournal.com]

You're right, there can be a true value that will be revealed in the future. Suppose there's someone with the magical ability to correctly value, who bids that much each time. If he never wins, then the winner always loses money, and pretty soon he'll be the only one left.

I think they bid (estimate of true value) - (hoped-for profit) - (risk premium). That's likely to go to someone who overestimates true value, but there's still room for a profit.

Re: Auction Theory

[minnehaha.livejournal.com]

No argument about that.

What it does mean is that the profit won't be maximized, because the buyer will be overpaying.

B