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Round up
1. The economics of blogging, and there are data in the comments.
2. Are ambidexterous people and watch enthusiasts more self-reflective? Hat tip to Fashion Incubator.
3. What kind of innovator are you? And here is the associated blog.
4. "Basketball vests (singlets) with electroluminescent displays that show a player's score, and number of fouls, are being trialled in Australia."
5. Gift certificates selling at more than face value on ebay? Why?
Posted by Tyler Cowen on December 6, 2006 at 01:59 PM in Web/Tech | Permalink
Comments
Two possibilities:
1) collectible?
2) You can't buy that denomination on the old navy website. If the buyer is indifferent between a $20 and $25 gift certificate (since he won't spend it, presumably), he ends up saving a penny, after shipping.
Note: I don't believe either of these... it's a mystery to me.
Posted by: patrick at Dec 6, 2006 2:32:52 PM
3) Stupidity?
Posted by: Anonymous at Dec 6, 2006 2:38:10 PM
Money laundering?
Posted by: meep at Dec 6, 2006 2:56:11 PM
Thee are non-monetary rewards to being the winning bidder (although one would, or should, expect much worse non-monetary negatives for overbidding, i.e. the thrill of victory should be outweighed by the stain of stupidity)
Posted by: theCoach at Dec 6, 2006 3:07:46 PM
Perhaps it is automated sniping software not being set with a reasonable upper limit. The strange part is that the over value bidders were experienced ebayers. It also may be a paypal thing - Old Navy might not accept the payment form the ebay bidders can use. They can also avoid the purchase showing up on a credit card bill.
Posted by: srboisvert at Dec 6, 2006 3:34:39 PM
Perhaps its some screwup with sniping software people use on ebay. Maybe some kind of bulk
sniper that could, concievably make money over time, but occasionaly throws out something
stupid like this.
Posted by: tyler h at Dec 6, 2006 3:40:48 PM
Aha beaten to the punch.
Posted by: tyler h at Dec 6, 2006 3:42:10 PM
The real question is how he plans to ship a gift card for $3.
Pack it in sand?
Posted by: bob montgomery at Dec 6, 2006 4:49:16 PM
I believe the competition story mentioned above--at first you want a sweater, but by the end you wan to win, but I also think that some of the competitive behavior comes from people incorporating some of the sunk cost of following the auction into their decision.
People get invested in these auctions for 7 days, and I know from experience that if you lose an auction you have been watching for a week, you can feel like a jackass for having wasted all that time. I don't know if I would feel mor ethan $2 worth of jackassedness, but it would not surprise me if someone did.
Some of the loss may be related to the endowment being endogenous to expectations a' la Koszegi and Rabin's forthcoming QJE paper "A Model of Reference Dependent Preferences." If you have a week to incorporate the item into your endowment as a function of the probability of winning, you may experience a loss if you do not win. If you are loss averse and you attached a high probaiblity to winning, that loss may exceed the amount of your overpayment.
Posted by: Matthew at Dec 6, 2006 5:04:15 PM
Economics is trying to fit lines through data points from the past.
Blogs are too new to have generated enough points to fit lines through in interesting ways...
Posted by: alphie at Dec 6, 2006 5:14:13 PM
Maybe the bidders thought it was funny.
Posted by: josh at Dec 6, 2006 5:38:39 PM
Let me shamlessly promote a very nice paper on E-bay auctions, written by a friend of mine:
http://www.econ.berkeley.edu/~ulrike/Papers/ebay15.pdf
Careful, linke goes to a pdf file.
Posted by: Commenterlein at Dec 6, 2006 6:00:45 PM
What's even odder is that there were two people making competitive bids. Looking at Old Navy's website, they charge $5 for shipping, no matter what the purchase. So, the cost is the same for this auction vs buying from ON.
Posted by: Phil at Dec 6, 2006 7:20:23 PM
I looked into this gift card thing a couple Christmas seasons ago. I actually found some people who had bought gift cards above their face value.
The answer? They're usually rural gift givers who want to give a specific card but cannot easily get to a store.
Posted by: Aaron at Dec 6, 2006 8:01:46 PM
I sent the winning bidder a message, asking them very politely why they would do such a thing. Hopefully I haven't embarrassed them too much and we soon will have a definitive answer.
Posted by: Mike Mead at Dec 6, 2006 10:26:00 PM
Would rather spend 1 minute searching and bidding above-value on eBay than driving to and standing in line at Old Navy (total of 30 min, although less when combined w/other errands).
Posted by: Sean at Dec 7, 2006 1:58:39 AM
I think it's pretty obvious. Paying a little more than $20 is still cheaper than driving to whereever old navy is through the crowds waiting in line, etc.
Posted by: Andrew at Dec 7, 2006 2:06:39 AM
Great paper, Commenterlein. I believe there is a simple explanation to the fact that experienced bidders are more likely to systematically overbid. These guys stay with Ebay *because* they win auctions often. In other words, they are auction junkies who derive utility from victory.
Posted by: Like that only at Dec 7, 2006 6:36:02 AM
As for the Old Navy gift certificate selling for more than face value, as patrick (first commentor) noted, there is no $20 gift certificate available on Old Navy's website. Also, Old Navy apparently charges tax. That $25 gift certificcate will now cost $27 (if tax is 8%). Also, it said that the gift card could be shipped free (or you could have it rushed for $15). I don't understand how it could be "joy of winning" - the last bid was placed 10 hours before the close of the auction, and this person KNEW what the next bid had to be - if you place a bid on Ebay, and the new high bid (not yours) falls within the minimum increment range for the current price level, then you KNOW what the other person has bid. In the auction, jason2273 bid $22 and the current high bid by wesome was $22, so jason2273 KNEW (or could have known) that simply placing a marginal bid equal to $22+increment (50 cents at that price level?) would be a winning bid. If someone is "win happy", isn't it really worth 50 cents to be the winner?
As for the paper on overbidding mentioned by Commenterlein, I would feel a lot better about the results if one additional factor was looked at (I skimmed the paper so maybe it was mentioned). That factor is payment type accepted. I spent a decent amount of time on Ebay, and for a while I was using Paypal. Then someone hacked my account and started buying mini-cameras and having them sent to the Ukraine. I got my money back through my bank (but had to change my checking account number), but Paypal kept asking me to give them my checking account number in order to reactivate my account. I refused, and anyone that said they were a "Paypal only seller" never received any of my business afterwards. If the fixed-price sellers were only Paypal (or only check/money order sellers, or worse, only money order sellers) then that could be a cause of why people bid more than the buy it now price.
Posted by: AZ at Dec 7, 2006 9:16:38 AM
Well everybody, I received and answer from the winning bidder himself. "I am far enough from an Old Navy that the gas there would exceed the $2."
Posted by: Mike Mead at Dec 7, 2006 10:55:10 AM
http://www.oldnavy.com/browse/product.do?cid=5547&pid=000062
claims that there's no shipping or sales tax on the gift cards. If this is true, he could have delivered $25 of value to his giftee for a penny more than he spent for which he will deliver $20.
I proceeded enough into the checkout process to know that their computer does not in fact intend to add anything to my bill other than the $25 if I go ahead.
-dk
Posted by: Dick King at Dec 7, 2006 1:40:03 PM
Perhaps the guy feels that Old Navy gift cards will outperform the dollar
Posted by: Aaron Fix at Dec 7, 2006 3:42:48 PM
Perhaps the guy feels that Old Navy gift cards will outperform the dollar
Posted by: Aaron Fix at Dec 7, 2006 3:43:11 PM
AZ-
"Then someone hacked my account and started buying mini-cameras and having them sent to the Ukraine"
You know that paypal has a spoof/unauth policy where they would have recovered all of your omney for you?
You should have just done that instead of abandoning paypal forever, that's the blood y reason people use that site.
Posted by: Andrew at Dec 7, 2006 8:28:03 PM
how can a gift card be taxed? that seems a little ridiculous, since that would mean the gift card itself, independent of its currency value in Old Navy stores, is being taxed. furthermore, anything purchased at the store would also be taxed at the time of purchase, so these goods would be double-taxed.
Posted by: The Tsunami at Dec 7, 2006 10:25:38 PM
