Selling stolen goods

24th June, 2006

Dear Economist,

My bicycle was recently stolen – the third one I’ve lost. Realising that the chance of recovering it was slim to none, I decided to sell my bike in its stolen state.

I knew the only way to find the cycle’s true value was with an auction, so I listed it on eBay. The winner of the auction would be the proud owner of the bike, should it ever be recovered.

After a few days a bidder emerged who was prepared to pay 3p for the chance of my bike being found. But eBay cancelled the listing. What can you now advise?

Orlando Oliver, via e-mail

Dear Orlando,

This is a fascinating variant on the idea of selling stolen goods, and I suspect that eBay misunderstood what you were doing.

Economists are always looking for new ways to broaden and deepen the world of markets and there is no doubt that this market should create value by shifting ownership of the missing bike to someone willing to bear the risks.

You presumably need one bike with certainty, and only one, and so are unlikely to value ownership of a contingent bike. On the other hand, some investors might well welcome the opportunity to buy the right to a thousand missing bicycles for just ₤30.

So – if eBay will not support your sale, what is the appropriate market? Perhaps you should try to sell the bicycle to the police. They are well placed to increase the possibility that the bike is found, and so they should be willing to pay a decent price…

Continued on

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