Quote:
Originally posted by K.A. Rutledge
That Ebay gets labeled as a junkyard is silly. The quality found there is exactly the same as is found anywhere else: there is a multitude of junk, a modicum of pretty good and a small amount of excellent. Believing otherwise the fault of that naive individual an not the forum, the auction or the company.
Kind regards,
Andy Rutledge
www.bonsai365.com/
zone 8, Texas
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Quite the contrary, Andy! Basic economic theory offers quite a strong argument that the top-notch material will not appear on ebay or other auction sites.
The key is information. When you buy a tree on ebay, you have less information about it than when you buy a tree at the local bonsai nursery. In particular, you typically buy based on a few pictures, without the opportunity to carefully inspect the tree in advance.
As a consequence, buyers have a very difficult time telling excellent trees from very good trees when they buy on-line, but less trouble when they buy in person. The result? On-line, relative to in-person, price for excellent trees falls somewhat, because of this uncertainty. Because of this effect, the market for excellent quality trees can actually "collapse": sellers can't sell excellent trees for their in-person market value in the on-line auctions, and so they withdraw these trees from that market. Thus when you log onto ebay, the higher part of the high end is notably absent.
I'm not saying that there are never great trees on ebay - I remember a certain pine from a seller in Texas a few months back that I would just be thrilled to have been able to afford
. I'm just saying that in general, the highest-end part of the market absent because of the information asymmetry.
The basic theory behind all this is set out in the 1970 paper that won George Akerlof a nobel prize in economics a couple of years ago: "The Market for Lemons,"
The Quarterly Journal of Economics. A google search for a few of those keywords will turn up plenty of further explanation.
Best regards,
Carl