This Australian guy, Ian Usher, is selling his entire life by auction on eBay in order to make a fresh start after getting a divorce. He’s selling his house, car, furniture, underpants, everything, all in one bundle.

My first reaction was that, aside from the good publicity he’s got from this stunt, the whole might be worth less than the sum of the parts here. I mean, it might not be such a good idea to sell everything together all in one bundle. It’s unlikely that anyone else has exactly the same tastes as Ian, and so I thought he might get more by splitting his stuff up and selling each piece separately.

Then I realised that the buyer can do exactly that — resell the bits that they don’t like on eBay. So the selling price that he gets for the bundle should be the sum of the values of the individual bits, minus the total transaction cost (eBay fees + cost of time) of selling the bits.

Now the question about whether to bundle or unbundle basically comes down to transaction costs. If Ian personally has low transaction costs (low opportunity cost of time, for example) compared to the average eBay buyer, then he’d be better off selling everything separately. If he has relatively high transaction costs then he should sell the bundle and “outsource” the individual transactions.

I guess there is a testable hypothesis here. When getting rid of old stuff on eBay, we should expect high income people (high opportunity cost of time) to sell things in bundles, and lower income people to sell things separately.