> When eBay first started, I loved the idea of auctions as a way to set market prices. From an economic and game-theory perspective, it is so optimal! > Clearl

> When eBay first started, I loved the idea of auctions as a way to set market prices. From an economic and game-theory perspective, it is so optimal! > Clearly as later examples like Amazon have shown, auctions don't make sense for most product categories. I believe this is mainly due to psychological reasons. I've always loved eBay as a way to introduce sanity into the prices of old/used items. Especially computer equipment, where "regular vendors" would rather let it sit on the shelf marked at 10x what its worth than actually price it to a level someone would be willing to pay. Of course for new items, it never made any sense. The eBay prices were sometimes even higher than regular vendors, hoping to catch people in the place they happened to be looking.