The Dangers of Auctions and The Psychology behind them.
Link to the article is http://www.nytimes.com/2009/10/24/technology/24shortcuts.html
The article talks about how you can lose money even after winning a bid. Basically, there are scams out there involving auctions. Specifically, online where money is transferred and the buyer doesn’t receive the item they bidded on. The article shows an example of someone who bid about 3k for a motorcycle that he never received. Furthermore, the article gives advice on how to avoid fraud in auctions. The biggest recommendation is to do research on the seller and to use credit cards as a way to recover the money if it is a fraud.
In class we learned about first and second priced auctions. We learned about the dominant strategies in different types of auction. Our class treats auctions like they are rational and logical. However, humans are not as rational as the approach of bidding we have been taught in class. The reality is that most people are impulsive when bidding and don’t sit there thinking about their true value and their bidding strategy. I think that what we learn in class should become more common knowledge so that people make more logical decision and less emotional psychology based decisions.