Showing posts with label eBay. Show all posts
Showing posts with label eBay. Show all posts

Sunday, March 15, 2020

Hoarding, price gouging, and backlash in the time of corona virus--updated

The NY Times has the story (followed by an update):

He Has 17,700 Bottles of Hand Sanitizer and Nowhere to Sell Them
Amazon cracked down on coronavirus price gouging. Now, some sellers are holding stockpiles of sanitizer and masks.
By Jack Nicas

"On March 1, the day after the first coronavirus death in the United States was announced, brothers Matt and Noah Colvin set out in a silver S.U.V. to pick up some hand sanitizer. Driving around Chattanooga, Tenn., they hit a Dollar Tree, then a Walmart, a Staples and a Home Depot. At each store, they cleaned out the shelves.

"Over the next three days, Noah Colvin took a 1,300-mile road trip across Tennessee and into Kentucky, filling a U-Haul truck with thousands of bottles of hand sanitizer and thousands of packs of antibacterial wipes, mostly from “little hole-in-the-wall dollar stores in the backwoods,” his brother said. “The major metro areas were cleaned out.”
...
"Mr. Colvin said he had posted 300 bottles of hand sanitizer and immediately sold them all for between $8 and $70 each, multiples higher than what he had bought them for. To him, “it was crazy money.” To many others, it was profiteering from a pandemic.

"The next day, Amazon pulled his items and thousands of other listings for sanitizer, wipes and face masks. The company suspended some of the sellers behind the listings and warned many others that if they kept running up prices, they’d lose their accounts. EBay soon followed with even stricter measures, prohibiting any U.S. sales of masks or sanitizer.
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And here's the update:

The Man With 17,700 Bottles of Hand Sanitizer Just Donated Them
A Tennessee man had planned to sell his stockpile at marked-up prices online. Now he is under investigation for price gouging.

"On Sunday, Amazon and eBay suspended him as a seller, which is how he has made his living for years. The company where he rented a storage unit kicked him out. And the Tennessee attorney general’s office sent him a cease-and-desist letter and opened an investigation.

“We will not tolerate price gouging in this time of exceptional need, and we will take aggressive action to stop it,” Attorney General Herbert H. Slatery III of Tennessee said in a news release.

"Tennessee’s price-gouging law prohibits charging “grossly excessive” prices for a variety of items, including food, gas and medical supplies, after the governor declares a state of emergency. The state can fine people up to $1,000 a violation."
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Here are all my posts on price gouging

Monday, September 21, 2015

eBay is 20

The Guardian has a nice column by John Naughton noticing that eBay is 20 years old this month, and suggesting that one of it's biggest innovations was its early reputation system:

How eBay built a new world on little more than trust--The ratings system introduced by the biggest car boot sale on earth is now used by everyone from Uber to Airbnb

Wednesday, June 10, 2015

Is sniping bad for eBay? New paper by Bakus, Blak, Masterov and Tadelis

Is Sniping A Problem For Online Auction Markets? by Matt Backus, Tom Blak,  Dimitriy V. Masterov, and Steve Tadelis

Abstract: "A common complaint about online auctions for consumer goods is the presence of “snipers,” who place bids in the final seconds of sequential ascending auctions with predetermined ending times. Roth and Ockenfels (2002) and Bajari and Hortacsu (2003) conjecture that snipers are best-responding to the existence of “incremental” bidders that bid up to their valuation only as they are outbid. Snipers aim to catch these incremental bidders at a price below their reserve, with no time to respond.  As a consequence, these incremental bidders may experience regret when they are outbid at the last moment at a price below their reservation value. We measure the effect of this experience on a new buyer’s propensity to participate in future auctions. We also consider an alternative explanation, rooted in the behavioral literature on the endowment effect. Bidders may gradually develop an attachment to the object while they are the high bidder, implying that the regret should increase with time spent in the lead. We show that the two narratives are econometrically separable,
and estimate them using a carefully selected subset of auctions from eBay.com."

They find that first-time bidders who are outbid in the final seconds of an auction are less likely to return to eBay: here's a graph of the probability of not returning, as a function of how close to the end of th auction the first time bidder was successfully sniped...


They conclude: "As a result, sniping has a negative impact on the growth rate of the auction platform."

Saturday, March 7, 2015

Sniping on eBay, revisited



Is Sniping A Problem For Online Auction Markets?

Matthew BackusTom Blake, Dimitriy V. Masterov, Steven Tadelis

NBER Working Paper No. 20942
Issued in February 2015
NBER Program(s):   IO 
A common complaint about online auctions for consumer goods is the presence of "snipers," who place bids in the final seconds of sequential ascending auctions with predetermined ending times. The literature conjectures that snipers are best-responding to the existence of "incremental" bidders that bid up to their valuation only as they are outbid. Snipers aim to catch these incremental bidders at a price below their reserve, with no time to respond. As a consequence, these incremental bidders may experience regret when they are outbid at the last moment at a price below their reservation value. We measure the effect of this experience on a new buyer's propensity to participate in future auctions. We show the effect to be causal using a carefully selected subset of auctions from eBay.com and instrumental variables estimation strategy. Bidders respond to sniping quite strongly and are between 4 and 18 percent less likely to return to the platform.

Sunday, December 22, 2013

The evolution of eBay

Once eBay was primarily an auction site...a story by Jeff Himmelman in the NY Times Sunday magazine brings us up to date: EBay’s Strategy for Taking On Amazon

"Most people think of eBay as an online auction house, the world’s biggest garage sale, which it has been for most of its life. But since Donahoe took over in 2008, he has slowly moved the company beyond auctions, developing technology partnerships with big retailers like Home Depot, Macy’s, Toys ‘‘R’’ Us and Target and expanding eBay’s online marketplace to include reliable, returnable goods at fixed prices. (Auctions currently represent just 30 percent of the purchases made at eBay.com; the site sells 13,000 cars a week through its mobile app alone, many at fixed prices.)

Under Donahoe, eBay has made 34 acquisitions over the last five years, most of them to provide the company and its retail partners with enhanced technology. EBay can help with the back end of websites, create interactive storefronts in real-world locations, streamline the electronic-payment process or help monitor inventory in real time. (Outsourcing some of the digital strategy and technological operations to eBay frees up companies to focus on what they presumably do best: Make and market their own products.) In select cities, eBay has also recently introduced eBay Now, an app that allows you to order goods from participating local vendors and have them delivered to your door in about an hour for a $5 fee. The company is betting its future on the idea that its interactive technology can turn shopping into a kind of entertainment, or at least make commerce something more than simply working through price-plus-shipping calculations. If eBay can get enough people into Dick’s Sporting Goods to try out a new set of golf clubs and then get them to buy those clubs in the store, instead of from Amazon, there’s a business model there.

A key element of eBay’s vision of the future is the digital wallet. On a basic level, having a ‘‘digital wallet’’ means paying with your phone, but it’s about a lot more than that; it’s as much a concept as a product. EBay bought PayPal in 2002, after PayPal established itself as a safe way to transfer money between people who didn’t know each other (thus facilitating eBay purchases). For the last several years, eBay has regarded digital payments through mobile devices as having the potential to change everything — to become, as David Marcus, PayPal’s president, puts it, ‘‘Money 3.0.’’'
...
"The best current example of the digital wallet’s promise, according to many in Silicon Valley, is Uber, a digital platform that connects riders and drivers. You enter your credit-card information into the Uber app once, and then every time you want to use it, the app knows where you are and shows you how many cars are nearby and how soon one can be available. You order with one touch on a mobile screen, and a text lets you know a driver is on the way and then another tells you when he’s near. He greets you by name, you tell him where you want to go and then, when you are dropped off, there is no further exchange — no tip, no receipt, no signing anything. The app takes care of all that for you. Uber didn’t change anything about the nature of cars or how they are driven. It just figured out how to use data and technology to make what was out there work much more efficiently. (EBay, through its acquisition of the company Shutl, has begun to exploit a similar inefficiency in the spare capacity of courier companies.)
...
"‘‘It’s not about payment,’’ Jack Dorsey, a founder of Square, a PayPal competitor, says. ‘‘It’s about identity. And it’s about the experience that a merchant can create, which is what actually builds loyalty. We believe that it’s important that the technology, the mechanics of payments, actually fade away to the background. They disappear completely.’’ After helping found Twitter in 2006, Dorsey became chief executive of Square in 2009. Its initial innovation was the Square Reader, a small device that plugs into the headphone jack of a smartphone or tablet and enables anyone, anywhere, to process a credit-card payment. (PayPal now has a similar reader.) In 2011, Square introduced what would become known as the Square Wallet, an app that links to a credit card (as Uber does) and allows consumers to pay either by holding their phones up to a scanner or, in some cases, simply by having the phones on in their pockets. Dorsey talks about how cool it is to get your coffee without having to do anything, but he also emphasizes what it means for the merchants. ‘‘The seller gets this very interesting tool,’’ he says. ‘‘They can recognize me when I walk in.’’ 

Thursday, July 11, 2013

From auctions to buy-it-now on eBay

eBay has changed since I started studying in the late 1990's, when it was all auctions all the time.
Here's the story:

SALES MECHANISMS IN ONLINE MARKETS:
WHAT HAPPENED TO INTERNET AUCTIONS?
by Liran Einav
Chiara Farronato
Jonathan D. Levin
Neel Sundaresan
Working Paper 19021
http://www.nber.org/papers/w19021


ABSTRACT
Consumer auctions were very popular in the early days of internet commerce, but today online sellers mostly use posted prices. Data from eBay shows that compositional shifts in the items being sold, or the sellers offering these items, cannot account for this evolution. Instead, the returns to sellers using auctions have diminished. We develop a model to distinguish two hypotheses: a shift in buyer demand away from auctions, and general narrowing of seller margins that favors posted prices. Our estimates suggest that the former is more important. We also provide evidence on where auctions still are used, and on why some sellers may continue to use both auctions and posted prices.

Friday, January 18, 2013

Lunch (with me) for a good cause, to be auctioned on eBay

The auction will start this weekend...
The fundraiser auction for Jewish Family Services of Silicon Valley, for a lunch date with me (or with one of these real celebrities), is about to begin. The auction goes live on eBay this (Friday) evening, January 18, at 7:45 pm, and ends Monday evening, January 28, 2013. 

The webpage  http://www.jfssv.org/celebrities-Jan2013.html shows links to the auctions, which will work after the auction begins. If you try the links prior to then, eBay returns a message saying the auction has ended or is unavailable.

My auction link is  http://www.ebay.com/itm/261153805382 This link should only work beginning 7:45 pm on Friday January 18, and ending 7:45 pm Monday January 28, 2013.

Sunday, January 23, 2011

Sniping on eBay, in Australia (radio interview)

Apparently eBay users in Australia are concerned about sniping (last minute bidding). I was interviewed for a radio report on the subject by Hagar Cohen, which you can hear here (in Australian): Snipe bidding: the dark side of online shopping.

My papers on the subject, with Axel Ockenfels and Dan Ariely are here.

Monday, April 5, 2010

Sniping in auctions with substitutes

On an auction site like eBay, many copies of the same good may be on offer for different auctions. A new sniping site, goSnipe, allows bidders to specify a group of auctions on which to submit last minute bids, one at a time, but to stop when the desired purchase is made.


Here's some research on bid sniping, and the underlying game theory.

Thursday, March 5, 2009

Trust and trustworthiness: promoting and maintaining it

Trust is essential for all sorts of transactions, and how to set up institutions to promote trust and trustworthiness in the marketplace is a big concern of market design.

It is even a big concern of armies trying to win the hearts and minds of a population in the face of a guerrilla insurgency. There's a very interesting essay in the Washington Post about earning, maintaining and restoring trust, by Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff: Building Our Best Weapon.

On a more technical note, I'm reading Community Structure and Market Outcomes: Towards a Theory of Repeated Games in Networks by Itay Fainmesser (who you can try to hire next year). He is interested how patterns of connections between buyers and sellers can promote trustworthy behavior through repeated play, and how the effort to achieve trust in the marketplace by engaging in long term relationships may exclude some parties from the market. In this connection he writes "...repeated interactions cannot perfectly substitute for institutions..."

The kinds of institutions he is thinking of are both legal (if you can sue me for non-performance, this makes it easier to trust me), and reputational (if you can give me a credible negative review that will impede my ability to transact in the future, this also makes it easier to trust me).

As it happens, I've also been reading about the recent redesign of eBay's reputational system: "ENGINEERING TRUST - RECIPROCITY IN THE PRODUCTION OF REPUTATION INFORMATION," - by Gary Bolton, Ben Greiner, and Axel Ockenfels. It is a very nice market design paper.

They describe some of the design concerns behind eBay's 2007 rollout of its new, more detailed feedback system, in which buyers are able to give some feedback on sellers anonymously. In particular, they describe how they and eBay became concerned that the old reputation system became less informative than it might have been, because the pattern of reciprocally positive feedback concealed underlying dissatisfactions. They describe how (both prospectively and retrospectively) they compared the relevant field data, and how laboratory experiments helped verify the intuitions gained in that way, and allowed them to see the efficiency effects of an improved reputation system.