You’ve bought a couch from a local thrift store, but the chair you’re using has a price tag of $500,000.
The couch was originally purchased in a thrift sale for $100,000 and is now worth $600,000, the new owner says.
The chair’s price is now $500k more than it was, and the sofa’s price will be $1 million more than what the couch’s original owner paid for it.
The couch is one of many furniture items on eBay and Amazon that have been priced out of their original sale price.
While you might not want to make an impulse purchase right away, you may have a few months to sell your item before the next one starts to disappear.
eBay and eBay sellers know this, and they know how to spot price increases in their auctions.
But a new study from University of Toronto economists finds that prices are not always the answer when it comes to a seller’s selling price.
In a study published in the American Economic Review, economists Shih-Ping Wu and Andrew Leung of the University of British Columbia analyzed eBay auctions of items in the last five years.
Wu and Leung found that items on auction sites that posted prices that fell well below their original selling prices (where they were still competitive) were often returned for a higher price than those that posted higher selling prices, but also had lower final selling prices.
For example, the item on auction site eBay that posted the highest selling price of $1,400 in September 2015 was returned for $2,500 more than its original selling price in September 2017.
When the item was sold for $3,000 more, the seller was rewarded with a higher final selling price than if the item had been sold at the original price.
“We find that price fluctuations are largely random, and can occur across a variety of different auction sites,” Wu and Lung write.
“However, in this study, we use a price-frequency index to determine the potential for price fluctuations to lead to price changes.”
The researchers used eBay’s auction software to determine that prices for items that posted high final selling pricing in the preceding five years were significantly higher than the prices posted in subsequent five years, indicating that price changes were not random.
But it’s not entirely clear how auction sites are designed to ensure that price volatility is minimized.
The researchers say the auction site may use a combination of algorithms and data mining to keep an eye on price fluctuations, but this is an area of research that has yet to be explored.
For more stories on how to buy a house, visit our House Buying Guide.
To read more about the research, go here.