EBAY and Trust

Considering the Prisoner’s Dilemma in this chapter, provide your own insight on how sites such as eBay “work” for most participants of this popular online auction site. Do they really work? Or is there too much risk?


The prisoners dilemma is based on trust, trust that the other individual will not give you up and ultimately allow for the most favorable outcome for both individuals.  For many this is a hard concept because there is a possibility that the other person may blame you, which would result in one individual getting off scott free while the other endures all the punishment.  EBAY in a sense works the same way, at least in regards to the trust factor; Ebay is a live auction that poses buyers and sellers together.  Buyers seek to purchase a good at a cheap price while sellers look to get the most money for their good.  If a price goes to high certain buyers will stop bidding because it is not in their best interest to go any higher.  These laws of economics require that buyers and seller work together much like in the prisoners dilemma to achieve the best result for both individuals.  However there happen to be other trust issues associated with ebay.  Sellers must trust that buyers will pay for what they won and buyers must trust that sellers will send them what they had won.  I personally have used ebay before and though my experiences have tended to be good on a few occasions the seller did not send me the item and ultimately resulting in me losing money.  For certain individuals ebay is a big risk and therefore they do not use it, but for others that are trustworthy ebay can be a goldmine as long as everyone works together, which promotes the best results.