Much was made in the early days of the Olympic cheesegrater relay about how torches were being sold on eBay for £2,000+
In many cases torchbearers were selling them in aid of charities, but there have also been instances of them selling them just for personal profit (having only had to pay £250 for them themselves). There has also been speculation about free torches which were given to the staff of official sponsors being put up for sale, and LOCOG themselves are also auctioning torches which their carriers opted not to pay for themselves.
The thing about eBay is, for most items, it’s the purest form of the definition of the value of an item being a function of the amount of money buyers are prepared to pay for something, and the amount of money sellers are prepared to sell that same thing for; for most items most people want to buy, there is always a constant stream of buyers and sellers with that item to buy and sell – as a buyer if the bidding goes above what you’re prepared to pay for it there will almost certainly be another one along soon for you to try your luck at, and for sellers you set your starting bid (or a reserve) at the lowest price you would be willing to accept for it; if it’s not selling then you are faced with the choice of either lowering your minimum, or not shifting the item, and if items as a purchaser you want are consistently selling at above your own limit likewise you have the choice of either upping your maximum bid or not having the item after all. Buyers and sellers alike adopt strategies to try to maximise their income and minimise their expenditure, and similarly maximise their chances of buying and selling their desired items, and thus for most kinds of item you see for sale on eBay, you’ll see the market adopts an equilibrium of the same things usually selling for around the same price.
Another factor which affects value in a free market economy is scarcity – the less there is of a highly desirable item, the more people are prepared to pay to have one, and the more people who have one are willing to accept as the minimum price in order to get rid of one; scarcity and desire also become self-reinforcing loops of the scarcer something is the more desirable it can become, the more desirable something becomes the scarcer the supply of it becomes as those who have them want to keep them – again, the market reaches an equilibrium.
And lastly, although the production cost of most items is rarely related to the sale value, it is always something one has to keep in mind as a possible factor, and to use as a negotiating tool when one is acting as a seller or a buyer.
So taking all this into account, when looking at the bids and buy-it-now prices for 2012 Olympic torches, I became suspicious.
Taking the current bids and buy-it-now prices of 2012 torches on eBay at the point of writing this, it seems that the average current value of a single torch is roughly £3,000. This is for an item of which 8,000 where actually made, apparently costing £500 to actually make, and originally offered for sale to the people selected to carry them in the relay at £250.
So on that basis, the apparent value of all the London 2012 Olympic torches in existence is £24,000,000.
Can this really be true?
But also, when you look at what is currently for sale on eBay, can it really be true that one torch in 8,000 can be worth £3,000, whilst a torch from the 1948 London Olympic torch relay is apparently not worth £4,500 (because nobody has yet bid on it), a torch from the 1972 Munich Olympics is only worth £2,500 to its current owner (and apparently not worth anything to anybody else, because nobody has bought it yet – indeed nobody has yet bid on another 1972 torch at £1,500)? Can it really be true that one of 8,000 London 2012 torches can be worth more than one of a handful of all the other previous Olympic torches?
What also adds to the suspicious nature of these supposed values on eBay is the number of bids attached to the torches; given general eBay user behaviour, it strikes me as quite odd that with the bidding on the torches around the £3,000 mark, some torches would only have a couple of bidders on them whilst others have 30 or 40 bidders – again, if one wants a torch badly enough to be willing to pay that kind of money for one, you would generally hedge your bidding and go down the list of them all.
Looking at the actual bidders in the actual auctions for each individual torch, the auctions are set to either private (so the usernames of the bidders are hidden), or from bidders apparently new to eBay with low feedback scores or histories of buying other items. There is also no indication of a behaviour of bidders bidding for one torch, being outbid, and then moving on to a torch with lower current bids – all the bidders seem to be clustered around just the one torch their bidding is attached to.
What this indicates to me is that actually most of the bidding on London 2012 Olympic torches is not genuine – that most of it is being carried out by sock puppets, false eBay identities created in order to artificially up the bidding of items in order to create the impression of higher demand and a high value.
Now I don’t doubt that there are indeed some people who are successfully selling torches for around £1,000 or £2,000, and that there might be some special torches which have a certain individual significance, or are being sold on behalf of a charity, which might fetch more.
But the idea that they’re all genuine selling for around £3,000 – selling for more than much rarer torches and putting the total value of them at £24,000,000? Nope, I don’t believe it.