Tuesday, September 2, 2008

The ebay Effect

One of the quirks of human behaviour is that we value things more highly if we own them. When selling your house, you remember the good times, but prospective buyers notice the cracks in the walls. One of the places where this effect can give you trouble is on ebay.

Suppose that you are searching for an item on ebay and are pleased to find it. You then make a bid. But the bidding won’t close for another three days. Two days later you see that there aren’t any higher bids. At this point, you begin to mentally treat the item as partially in your possession.

The rest of this story is familiar to frequent users of ebay. In the last minutes of the auction, a higher bid will come in and anger you. This newcomer has a lot of nerve! After all, this item has been nearly yours for three days. Now you’re tempted to enter bids higher than the upper limit you decided upon three days earlier.

I don’t have any grand ideas for how to combat this tendency. Maybe just being aware of it can help us save some money in this type of situation.

3 comments:

  1. Hi,
    One way of combating this is to not bid on items that are closing so far away. For items that are closing in more than 24 hours, I usually just add them to my 'Watch Item' list as opposed to bid on them.

    If the price is still attractive closer to the end of the auction, only then will I bid...

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  2. Fernando,

    This sounds like an effective way to avoid the trap of starting to feel like the item is yours. Of course, you become the guy who is taking the item away from someone else who feels like the owner for a few days. I guess every ebay newbie has to go through the pain of losing an item at the last minute.

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  3. I recommend only bidding in the last few minutes of the auction. Yes, I'm the person that will "steal" somebody else's auction. ;-)

    This is best done with "auction sniping" software, which can even group similar items together and bid at the last minute on each until you win the item.

    The advantage of this method is that you'll never be tempted to bid over the maximum amount you had decided.

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