Recent Blog Posts
-
The Times' Rorshach Geithner Story
Apr 27 20099:04am EDT -
Sinking Animal Spirits
Apr 27 20098:04am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:04am EDT -
Be Your Own Counterfeiter
Apr 26 20099:04am EDT -
Being Tim Geithner
Apr 25 200912:04pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:04am EDT -
What Good is the News?
Apr 25 20098:04am EDT -
Stressful Enough
Apr 24 20092:04pm EDT -
Not Regretting the Pound
Apr 24 20091:04pm EDT -
Introducing the New Ford Squeeze
Apr 24 20099:04am EDT -
Non-Economic Questions of the Day
Apr 24 20099:04am EDT -
The Stress Test Blind Alley
Apr 24 20098:04am EDT -
Happy Hour
Apr 23 20099:04pm EDT -
Recovery Without Rebalancing
Apr 23 20096:04pm EDT -
The Shape of Your Recession
Apr 23 20095:04pm EDT
Links
- Felix Salmon

- DealBreaker

- Ryan Avent: The Bellows

- The Epicurean Dealmaker

- Chris Anderson

- Ultimi Barbarorum

- MarketBeat

- Michelle Leder

- John Quiggin

- The Panelist

- Andrew Leonard

- Streetsblog

- Brad Setser

- Michael Mandel

- Financial Crookery

- Kash Mansori

- Dean Baker

- Calculated Risk

- Free Exchange

- Curbed

- Lance Knobel

- Econospeak

- Carbon Tax Center

- Overcoming Bias

- Mark Thoma

- Naked Capitalism

- Alphaville

- Barry Ritholtz

- Alexander Campbell

- The Bayesian Heresy

- Brad DeLong

- DealBook

- Greg Mankiw

- Deal Journal

- FP Passport

- Carl Bialik

- Marginal Revolution

- A Fistful of Euros

- Dan Gross

The Economics of eBay
Aaron Schiff notes, quite rightly, that eBay uses anticompetitive tactics in order to retain its market share:
One of the things that probably makes it hard to compete with eBay is that eBay 'owns' the reputations of its users. If you want to switch to an alternative site, you have to start from scratch with a blank reputation. As various studies have shown, having a good reputation is beneficial to some extent, at least for sellers. However, eBay has resisted attempts to let people either export their reputations to alternative auction sites, or use third-party reputation systems to manage their reputation on eBay (see here, for example).
This raises an interesting question: in the case of eBay in particular, would more competition be good or bad for consumers?
Generally, of course, competition is a good thing from a consumer point of view. And if eBay had more of it, maybe its customer service would be better, or its website would be easier to use, or its fees would be lower.
On the other hand, consumers benefit enormously from eBay's status as the online auction site. Sellers all go there because that's where all the buyers are, and vice versa, which means much more liquidity and a much higher probability of a successful sale or finding what you're looking for.
I have no idea how one would even begin to start measuring such trade-offs. But it's rare enough just to find such a high-profile situation where increased competition isn't obviously good for consumers.






