Re: [CR]A new record? - and way early sales!

(Example: Component Manufacturers:Chater-Lea)

From: <hersefan@comcast.net>
To: haxixe@gmail.com, "Mark Fulton" <markfulton5@mac.com>
Subject: Re: [CR]A new record? - and way early sales!
Date: Thu, 18 Oct 2007 13:39:02 +0000
cc: classicrendezvous@bikelist.org
cc: classicrendezvous@bikelist.org

Actually I can think of a reason...

Let us suppose someone said to the seller "I'll give you 10K instead of the 5K if you end the auction now". Perhaps this buyer was willing to go as high as 12K on the bidding, and thinks there is a chance someone else might even go higher.

But the seller, as everyone else, knows that there is also a chance that no other buyer will go much higher than the current 5K. In this case, the seller locks in another 5K by selling early with certainty, and the buyer gets the piece for 2K less than what their max bid would be. For the seller, if the certain additional 5K exceeds the expected value of seeing the auction to the end, it makes perfect sense to end the auction early. And of course, sellers relative aversion to risk is also crucial in this calculation (i.e if a gambler than might want auction to go to end unless early payoff is even greater). This analysis also assumes relatively thin markets where buyers "reservation prices" may vary by considerable amounts.

In general, I've never wanted to end ebay auctions early since usually the seller is always made worse off. But now I realize that if the payoff for early sale is great enough, it can make perfect economic sense.

Mike Kone in Boulder CO Boulder Bicycle Rene Herse Bicycles Inc. Housingmetrics Inc. - data analysis for the housing biz


-------------- Original message --------------
From: Kurt Sperry

> "*This listing () has been removed or is no longer available. Please make

\r?\n> sure you entered the right item number. *

\r?\n> If the listing was removed by eBay, consider it canceled. Note: Listings

\r?\n> that have ended more than 90 days ago will no longer appear on eBay.

\r?\n>

\r?\n> Some kind of underhanded dealing it looks like. I can't think of a rational

\r?\n> reason why a seller would be advantaged by ending an auction early. At

\r?\n> least not voluntarily. An auction is a legal agreement to sell to the

\r?\n> highest bidder at the scheduled auction close. This one smells funny.

\r?\n>

\r?\n> Kurt Sperry

\r?\n> Bellingham WA

\r?\n> USA