Selling Pokemon Cards on Ebay
Pokemon is a global phenomenon. Most of us have interacted with Pokemon in some form or another – from the Pokemon card game to Pokemon GO. This year a single Pokemon card sold for a whopping $233,000 and made many people realize that they can earn money through reselling their old Pokemon cards. But will this realization affect many people? To simply put it, YES! Looking at Pokemon GO alone there was a billion cumulative downloads of the application by March 2019. This application is a small part of the Pokemon franchise and hence this shows the global impact of Pokemon. Hence, we can say that the number of people that have been affected by Pokemon form a giant connected component as the number of people affected are a significant portion of the human population.
As many potential sellers of Pokemon cards now flood Ebay, the question arises of is there an optimal way to set up your auction on Ebay, in particular through utilizing either a public minimum bid or a secret reserve price? In a homework we compared a reserve bid method with a posted price method and came to the conclusion that a reserve bid method was optimal. Now let us explore if there is a type of reserve bid that is optimal. Ebay can act as a first price sealed-bid auction where we can utilize a public minimum bid and a secret reserve price. The study below focused on empirical results and looked at what happened with pairs of two identical cards in which they were auctioned using both a public minimum bid and a secret reserve price and both these values were the same. It was discovered that when dealing with cheap Pokemon cards a secret reserve price is worse for the seller. Firstly, only 46% of secret reserve auctions resulted in sales while 70% of public minimum bid auctions resulted in sales. That means 54% of sellers left the auction with a payoff of 0 if they utilized a secret reserve whilst only 30% of sellers left the auction with a payoff of 0 if they utilized a public minimum bid. Moreover, the secret reserve auction led to less serious bidders and a lower final auction price. This means that the seller’s revenue and in turn their profit was higher if they utilized a public minimum bid. The paper agrees with Kaiser and Kaiser’s point that if your reserve price is below $25 then do not use a reserve auction as bidders think a reserve auction is expensive. On the other hand, the paper states that if an expensive item is being auctioned, then it is more effective to use a secret reserve auction. This is further shown through the fact that mint set of US coins with a higher book value are sold via a secret reserve auction.
Hence, if you want to sell a Pokemon card on Ebay that you think is cheap, then sell it using a public minimum bid. However, in the rare case that you are selling an expensive Pokemon card, it is better to sell it via a secret auction reserve.
Sources:
- https://www.nber.org/papers/w8183.pdf
- https://sea.mashable.com/culture/11639/this-is-the-most-expensive-pokemon-card-in-the-world-its-priced-at-us233000
- https://www.businessofapps.com/data/pokemon-go-statistics/