New research has looked into the science of eBay’s Best Offer feature and how buyers and sellers can strategically play for greater success.
The research discovered that buyers were discouraged by slow rejections of their offers and, as a result, were less likely to make counteroffers. But buyers take note: The research also indicated that a slow response time could mean the offer was very close to the seller’s desired price.
The finding adds a new element to game theory — the scientific study of strategic interactions — by considering not just what people choose, but how quickly they choose it.
– Ian Krajbich, psychology professor, UCLA
In some bargaining situations, decision-makers may have private plans for every contingency. But when decisions must be made on the spot, the researchers asked, do bargainers betray some of their private information, and if so, can this influence the deal’s outcome? For example, when bargaining over a price, a seller with a prepared plan can quickly accept or reject any offer. But without a prepared plan, the seller might need time to consider an offer, inadvertently revealing how attractive they actually find it.
The researchers, led by Complexity Science Hub Vienna postdoctoral scholar Miruna Cotet, who conducted the research during her time as a doctoral student at the Ohio State University, hypothesized that eBay sellers who take a long time to reject offers signal that they are on the fence about whether to accept or reject. The buyer’s offer might have been close to the price they were hoping to get, and the buyer should make another offer. Sellers who reject an offer quickly signal that the buyer missed the mark by a long shot. Unless the buyer is willing to go much higher in price, it might not be worth making another offer.
Both the eBay and experimental data showed that sellers were, indeed, slower to reject better offers and faster to reject worse offers. The longer the seller’s rejection time to the first offer, the more likely they were to accept the buyer’s second offer. The finding was so strong that the researchers could predict whether a seller would accept the buyer’s second offer based on how quickly they rejected the first offer.
However, buyers seem to be discouraged by slow responses from the seller. The slower the sellers were to reject them, the less likely buyers were to make another offer. In fact, buyers were more likely to make second offers to sellers who had slapped them down quickly.
This is all interesting, but the researchers appear to have missed one vital nugget of information – what happens when offers are accepted or rejected at lightening speed… i.e. when the seller has put auto accept/decline on their best offers?
This research would suggest that it’s worth having a buffer zone between auto rejection and auto accept where you can slow down your response to suggest an offer that you would accept… but do professional sellers have time to play this game? Thoughts in comments below please!
