Define
"market". If it sells for 100 times the average value that others
would pay, is this "the" market? Or "a" market (a market of one)?
I would suspect that if someone paid it, it is "a" market. But not of
one,
it's a market of all the people who bid on it, or wanted to but got scared
off by the price. Of course it's not the only market.
There are, and
have been, for decades, valid mathematical and actuarial
methods for determining the value of a given object based on several
criteria, including of course supply and demand. Why should ending prices
of eBay auctions all of a sudden supercede that science?
Because the science is
WRONG. Period. If "established" practice says an item
is worth say $10, but most of those items sell for $100 on ebay, then, well,
yeah, the science is flat wrong - at least as far as predicting what an item
is worth in terms of dollars that people will pay for it. Well, ok, maybe
the science is right in theory, but in practice, it's just plain wrong.
Science ? Well, I'd go for common sense, and eBay is missing
a lot of that. Fist, yes, it's a kind of a market, but not in
a traditional sense, and not in the sense the usual economy
theories use this term.
To form a reliable (sometimes called true) price, several things
need to come together. The most important is that the goods in
question have to be comperable (standardised) and in a steady
supply, right after followed by theneed for informed participants
(Beside that, unrestricted access for sellers and buyers is the
next one). And here already eBay fails. There are no standardized
goods, nor is the suppl steady nore are Buyers and sellers 'informed'.
EBay is just a collecion of non connected, single sales. Each
may be described as a market in itself. but together they don't
form single market and don't deliver true meter for prices. A
stock exchenge, a quite good example for a true market, builds
a price by leveling up all 'buy' and 'sell' at a given time. If
a stock exchange would work like eBay, we could still live a fine
life without all these financial news.
Now one may argue, that eBay may have some of the fast pace of
a s(t)ock exchange, but is rather like a classic business. Well,
not wrong, but still the compareable offers (standardized product)
and the steady supply is missing. The eratic prices at eBay are
exacly a sign for these missing elements. In a classic market
place, price changes are done with a damping. A grocery store
doesn't rise it's prices as soon as the first customer is willing
to pay the asked price, nor does it lower it if one is not willing
to pay. The owner will watch his customers and compare to his
competitors and rise or lower the price acordingly. Also as any
real merchant he will include things like his price to buy or
produce the goods and other factors like storage cost (if the
goods are storeable at all).
I think I don't have to mention the influence of 'marketing'
the difference between a hyped up sale and a two liner can be
a hunded times.
All these things missing or not valid on eBay (when looking
at classic computers). Therefore eBay does not deliver a
dependable price line. Each and every auction just accounts
for itself.
Of couse, with proper knowledge and very carefull handling
eBay may give hints about a general direction - but these
are often more nothing else then general indicators to the
over all economical situation.
Sallams attempt to see eBay as a pure statistical source and
normalizeing the prices by building averages and ignoring
outliers may not be wrong, but there is still the problem of
comperable goods. One just cant put a TRS-80 M1 Keyboard,
a full unit (including the CRT) and a beautifull setup with
all bells and whissles into one calculation.
Gruss
H.
--
VCF Europa 4.0 am 03./04. Mai 2003 in Muenchen
http://www.vcfe.org/
