• The outcome of the sock auction. This is an email from the person who posted the auction.
Hello!

Sorry it took some time, resolving it was a bit of a chore. The socks sold for $355 which is a far cry from the top bid of$10'200, but more than the rest of the stuff combined.

The auction had a total of 381 bids from 336 bidders plus 12 bids that were canceled - all with the "entered the wrong amount"- reason. The top bidder sent me a message  within minutes of the auction closing saying he did not intend to pay, none of the top ten ($9200-$10200) accepted the 2nd chance offer and only one of them mailed me  back saying he did not intend to do so - the rest of them simply let the offer expire.

Terry and I agreed beforehand (about 3 days before closing) that should this happen I would relist the socks without the offer - this caused some whining in the comments  section of his blog, so we agreed that if anyone contacted me and offered to pay before the top 10 had all rejected, I would offer it to them as well. I wanted to send out  messages to all bidders but ebay does not allow that so sadly I had to rely on people reading Terry's blog.

A total of four people got in touch and offered to pay, two of those offered to raise their bids substantially but I since I could only send 2nd chance offers to the amount of  their original bid we settled for that.

... Let me know if you need more information! I cannot give you names, but any other statistics should be fine.

- e.saint
• Hidden problems with auction design, contributed by Brandon Carroll. This ebay auction illustrates two problems that can arise in auction design. First, bundling more than one item in a bid can make the auction get out of wack because different people have different values for the different items, and there is not necessarily a consistent way among the people of combining the values. Second, some goods have more of a public value than a private value, meaning that the item only has value because other people value it too. The socks and game are clearly not privately worth the bidding amount to anyone, but being “more charitable” than others might have public value.
• Brandon's thoughts: (Mike's note: Brandon is correct)
• I don't think “bundling” the items together was really the problem. He offered a free copy of the game to everyone that bid on the socks, not just to the winner. Thus, people had an incentive to bid but not win, because that would mean that they would get the free game without having to spend any money. So my thought is that most people that bid on them did not actually want to win the auction and probably had no intention of paying what they bid. They just wanted to get in on the bidding to get a free copy of the game, trusting that someone else would come along and bid higher so that they wouldn’t end up with an obligation to pay. Thus, they were trying to game the system by getting a free copy of VVVVVV without actually having to buy anything. It almost seems like a kind of reverse stag hunt to me, where they’re trusting that there is at least one more person out there willing to do the same thing they were doing, thus freeing them of the obligation to pay.
• I agree with your comment about wanting to be “more charitable” increasing the price on items like this, but I don’t think that’s the case here. My reasoning is that the other socks the same seller has put up (themed for games that are just a popular as VVVVVV) are also for the same charity, but are only selling for about $20 to$30. That’s still a lot to pay for a pair of socks (thus the price being higher since it’s for charity). However, if you look at the bidding history for the VVVVVV socks, you will see that it has steadily increased to $10,200 bid by bid and that the same people aren’t bidding over and over again. In fact, many of the highest bids were made with accounts that have e-bay’s “new member” icon next to them, as if someone created the account just for that purpose. If the price had suddenly jumped to$10,200, I could see that being a rich person wanting to be charitable. I doubt that’s the case with so many different people bidding such huge amounts though.
• Outcome according to the seller:
• Hello!
• Sorry it took some time, resolving it was a bit of a chore. The socks sold for $355 which is a far cry from the top bid of$10'200, but more than the rest of the stuff combined.
• The auction had a total of 381 bids from 336 bidders plus 12 bids that were canceled - all with the “entered the wrong amount”- reason. The top bidder sent me a message within minutes of the auction closing saying he did not intend to pay, none of the top ten ($9200-$10200) accepted the 2nd chance offer and only one of them mailed me back saying he did not intend to do so - the rest of them simply let the offer expire.
• Terry and I agreed beforehand (about 3 days before closing) that should this happen I would relist the socks without the offer - this caused some whining in the comments section of his blog, so we agreed that if anyone contacted me and offered to pay before the top 10 had all rejected, I would offer it to them as well. I wanted to send out messages to all bidders but ebay does not allow that so sadly I had to rely on people reading Terry's blog.
• A total of four people got in touch and offered to pay, two of those offered to raise their bids substantially but I since I could only send 2nd chance offers to the amount of their original bid we settled for that.
• … Let me know if you need more information! I cannot give you names, but any other statistics should be fine.
• e.saint