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Economist on Net.Auctions
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Date: Sun, 1 Jun 1997 00:04:02 -0700
To: [email protected]
Subject: Economist on Net.Auctions
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no earth-shattering revelations, but tuesday's audience should do their
class reading for the pop quiz..
Going, going . . .
THE Internet may have been the playground of the geeks for the past
few decades, but its future belongs to an even more child-like tribe:
economists. The network is becoming the ideal marketplace, where
legions of buyers and sellers, both armed to the teeth with relevant
information, can set prices as efficiently as any trading floor. As a
result, market theories that have long been confined to
business-school computer simulations can now have their day of
reckoning as real people exchange real goods and money on-line.
Nowhere is this better seen than with the economists' favourite sort
of market: auctions.
More than 150 auction sites are now open on the Web, selling
everything from industrial machinery to rare stamps. Airlines such as
Cathay Pacific and American have auctioned spare seats on their Web
sites. AuctionWeb, which is a mixture of a classified-ad service and
an auction room for people selling everything from rare Barbie dolls
to barbecue grills, conducted 330,000 auctions on-line in the first
quarter of this year alone. Onsale, the largest on-line auction
service and one of the few profitable ones, sells $6m worth of
computer equipment and electronic goods a month. Last month it became
the first on-line auction firm to hit the stockmarket, going public at
a valuation of nearly $100m.
The Internet's chief advantage for auctioneers is the size of its
audience. Its global reach brings a critical mass of buyers and
sellers to the most popular auction sites, avoiding the problem of
insufficient trading that bedevils many of their cousins in the
physical world. Indeed, quick, easy virtual auctions carry a hint of
the sort of hyper-efficient capitalism that Internet fans have long
been promised.
read the rest at http://www.economist.com/issue/31-05-97/wb8772.html
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Robert Hettinga ([email protected]), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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