The Value of Virginity
While taking a quick break from work to read the news I came across this little tid bit. An interesting illustration of the concept of scarcity!
While taking a quick break from work to read the news I came across this little tid bit. An interesting illustration of the concept of scarcity!
This is one situation where the marginal revenue curve will be insanely downward sloping methinks …
The blatantly photoshopped picture suggests one of two things: she has an ugly face, or a bad figure. Caveat emptor!
“The blatantly photoshopped picture suggests one of two things: she has an ugly face, or a bad figure. Caveat emptor!”
I wonder if this is an asset price bubble?
The current top bidder is an Aussie …
http://www.thesun.co.uk/sol/homepage/features/article2123389.ece
“Natalie has since faced a steady stream of criticism from women and allegations from men over the validity of her virginity claims.” Lol! With the release of these new pics, I’m suspicious too.
The question is; has young Natalie taken any measures to prevent false bidding? Is there any incentive for honesty, or punishment for fictitious bidding?
It will be interesting to see how this plays out from an efficiency stand-point, as well as a quality of goods perspective. Regardless of quality (I cannot shake the idea of a “market for lemons” out of my head), I suspect this will end in a classic case of buyer’s remorse.
sounds like it’s an experience good.
Guess you can’t really try before you buy since it is an irreverisble decision!!
Hmmm irreversible decisions, can I work real options into this somehow….
“Regardless of quality (I cannot shake the idea of a “market for lemons” out of my head), I suspect this will end in a classic case of buyer’s remorse.”
I’m pretty sure that there is no market failure here – as ultimately the buyer is willing to pay six odd million and the seller is willing to sell. However, ex post I can imagine someone coming out less than pleased …
“Hmmm irreversible decisions, can I work real options into this somehow….”
Well the return from selling her virginity could depend on an underlying social variable eg demand for deflowering. If that variable is stochastic then don’t you have some scope for real options analysis 😛
Given the information assyemetry you would expect people to discounts their bids. Therefore given the size of the current bids (and assuming they are legit!) I can only wonder how large the full information bid would be….
I guess the question then is whether the “demand for deflowering” is very volatile. The more volatilie it is, the more value there is in waiting.
She wouldn’t want to sell herself short after all just because we are currently in a low demand state, remember what larry flint said when he was trying to get Hustler bailed out….
I wonder if she set a reserve price to account for this:D
“I can only wonder how large the full information bid would be”
I don’t know. Maybe we have a mix of an asset price bubble and a status good.
Say, the price climbed past people valuations at first because they believed “someone” would pay more – this only happens because information surround valuations is heterogeneous and asymmetric.
Given this, the price may have climbed to such a level that “buyer her flower” became a status good – and so the price then drove itself up in the final range.
@Matt Nolan
While in theory an auction should deliver an optimal/”non-lemon” result, i suspect the inherent asymmetry of information between buyer and seller in this case will pose greater influence upon the buyer’s utility than say if the product was last month’s issue of The Economist.
I guess the other variable to factor into ones bidding strategy, is whether or not there is any resale value.
hmm, I guess resale value would come from people who really want to purchase but would be ashamed to publicly bid.
I would say resale value would be quite high!
“While in theory an auction should deliver an optimal/”non-lemon” result, i suspect the inherent asymmetry of information between buyer and seller in this case will pose greater influence upon the buyer’s utility than say if the product was last month’s issue of The Economist.”
That doesn’t make the outcome suboptimal “ex-ante” so there is so no market failure. Furthermore, the potential for the buyer to be upset “ex-post” implies that there must be some, larger, potential for him to be happy – or else he would have done it in the first place …
“I would say resale value would be quite high!”
I’m not sure it would reach into the millions though – would it?
Agreed, but then don’t we have a case of a two goods as complements? i.e., now the buyer is purchasing both secrecy and the girl?