New research reveals how eBay sellers and buyers can use psychological strategies to secure better deals, with the timing of response playing a crucial role.
A new study, published in the Proceedings of the National Academy of Sciences, has unearthed key insights into the art of bargaining on eBay, revealing strategies that can lead to better deals for both buyers and sellers.
Led by Miruna Cotet, a Complexity Science Hub Vienna postdoctoral scholar who conducted the study as a doctoral student at the Ohio State University, the research highlights how response times in bargaining exchanges can signal a seller’s true valuation of an offer, providing valuable cues for savvy negotiators.
“These findings add a new element to game theory by considering not just what people choose, but how quickly they choose it,” corresponding author Ian Krajbich, a psychology professor at UCLA, said in a news release.
On eBay, sellers can opt to allow buyers to make offers on items listed for sale. The seller then has the choice to accept or reject these offers, with the opportunity for the buyer to counter-offer if rejected. This exchange can continue until an agreement is reached or one party disengages.
The researchers analyzed approximately 1 million bargaining exchanges using a dataset provided by eBay from 2012 to 2013. In addition, they conducted an experiment by creating several eBay accounts to make thousands of offers on collectible cards, such as Pokemon and baseball cards.
Their findings were telling: sellers who were slower to reject an offer were more likely to accept a subsequent offer that was close to the original. Conversely, quick rejections often indicated that the initial offer was far from acceptable, suggesting that buyers would need to significantly raise their offer to engage the seller.
“But what’s maybe most surprising in these results is that buyers don’t seem to be using this information as strategically as they should,” Krajbich added.
Instead of interpreting a slow rejection as a sign they were close to the desired price, buyers tended to be discouraged. This often led them to either make fewer counteroffers or to respond to immediate rejections more frequently.
The study found no evidence suggesting that slow rejections led buyers to explore other sellers, use the “buy it now” option, or reconsider their purchases. This indicates a critical opportunity for both sellers and buyers to improve their bargaining outcomes.
Sellers should avoid slow responses to keep buyers engaged, thereby enhancing the chance of closing sales. Buyers, on the other hand, should interpret slow rejections as a positive indication that their offer was near the mark and respond with renewed offers.
“Take a slow response as a good sign rather than a bad sign,” added Krajbich. “Don’t get discouraged. Don’t think that the seller is lazy or just dragging you along. Instead, consider that you might have them on the hook.”
This research not only aids in understanding the strategic nuances of online bargaining but also paves the way for future studies focusing on improving negotiation outcomes in various contexts.
In the competitive world of eBay, timing isn’t just money — it’s insight, strategy and the key to better deals.