Originally Posted by
JeffE
Jim R's point is well taken, and it's the classic economics viewpoint. It's also a little bit wrong. The problem is that prices on eBay are not driven by hundreds or even thousands of independent bidders looking to make rational choices and make money for themselves, like classical market conditions. Instead, I would guess that prices on eBay are being driven by fewer than 100 guys who all read the same websites and are influenced by each other's bidding -- in other words, typical "herd" or "stampede" pricing. When a razor starts to become popular or prices for that razor start to rise noticeably, everyone of the people bidding on eBay rushes in and starts bidding on that razor. Then everyone rushes off to buy the next thing. In other words, eBay may represent what people are willing to pay AT THIS MINUTE, but that doesn't really represent anything close to fair market value.