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Fig.1 Buyer beware!

Have you come across this? Every so often a book is priced outrageously. Do some people actually buy at this price?! Is it an error? Is it a deliberate error that improves the ranking of an item or a seller on Amazon?

I've been buying ex-library books for 28p +P&P. 

Like old VHS cassettes there are books being 'dumped' - some are out of print gems that have not been digitised so you get to reference directly a book that has been cited rather than relying simply on what others have thought. 

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Picture of David Tracey

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It's two forms of algorithmic pricing colliding with each other. You'll probably find another retailer elsewhere that is offering it for either a little more or a little less.


Here's how it works: Retailer A offers a book for sale, which he doesn't actually have. If someone says they want it, he'll have to buy it, and obviously he wants to make a profit, so he'll list it at say 10% above what it's advertised for by retailer B.


Retailer B, on the other hand, has the book, but wants to get the best price for it while having the best chance of a sale, so he offers it for just a little less than the highest price he can find - which happens to be Retailer A, who of course has based his price on Retailer B's.

So for example: B offers the book for 10 pounds. A sees this, and offers it for 12 pounds. B adjusts his price to 11.50, A ups his to 13.75 etc etc... If it's all computerised with no sanity check, the buyer and seller may never realise, other than wondering why they never sell a copy of thhat particular book!

 

If that doesn't make sense, here's a better explanation: http://www.michaeleisen.org/blog/?p=358