[CommunityDiscussion]Bearing the Market Collapse Risk

So with Evo going fucking bonkers it got me thinking, esp with a bunch of people posting wondering the same thing. If Evo (or any marketplace) with centralized escrow collapses for whatever reason (seizure, hack, exit scam, whatever), who should bear the brunt of the loss? In this case, every transaction that is sitting in escrow will have a loser. There will be no "winner" in it as the "winner" is the 3rd party (escrow). So what happens next basically becomes who bears the brunt of an escrow collapse. Should it be the vendor or the buyer (or a split).

This is meant as a discussion, just something to think about it. So you have two basic scenarios in this case (we'll ignore bad vendors who never planned on sending product no matter what) - you have orders that were shipped and orders that were not shipped before the market/escrow collapse.

I believe escrow serves mostly a buyer-centric function. Its there to protect the buyer. When escrow collapses, you have a very shitty situation. Some people believe that the vendor should essentially eat the loss. The following is just my opinion, am curious what others think.

Here's what I think are "fair" outcomes in this type of situation

  1. If the product has NOT shipped

I'd accept this as a loss to me (as the buyer). I wouldn't expect the vendor to ship under these circumstances. The exception is if the vendor sat on the order for too long. If an order is a week old, then that's much different. But there is probably some fair amount of time to process an order and get it shipped. Say somewhere b/w 48-72 hours in most cases. Essentially if an order is less than 48-72 hours old when escrow collapses, this is a buyer loss.

  1. If the product has shipped

This is tough one. If it were me, I'd offer to split the loss with the vendor 50-50 once i receive the product.

So the outcomes are more vendor friendly. I guess the reason I have it that way is b/c I see escrow as more of a buyer-centric protection tool and as such, generally when you derive more benefit from something than someone else is, you should assume more of the risk. Obviously given my moniker, I like playing hypotheticals on where risk should lie and who should bear risk in various scenarios. Just my opinions/thoughts. Curious what others think when something like this happens. I consider this almost like a case of a major natural disaster where some of the usual rules of conduct get thrown out the window. I'm sure people are freaking out, esp ones that have recently placed an order. If Evo is fucked up genuinely, I guess we'll be seeing these questions play out.


Comments


[3 Points] gwern:

Is this a question of morality or economics?


[2 Points] None:

I think you've nailed it- if it's in escrow, cancel it, tough shit for the buyer. If it's shipped, then personally I'd offer to soften that blow for the seller (especially since I only deal with people I like/don't hate at least) and pass that price along to the next person... but I think in that situation the seller should expect to eat the loss and consider it a happy bonus when the buyer is decent about it.

I'm guessing the math gets different for personal use buyers, but I'd probably offer to split the loss with anyone I was buying from- if only to keep the business relationship from taking a ding.


[2 Points] select1on:

Buyers accept the loss, vendors undoubtedly will suffer far worse. Its the cost of buying. I think buyers should accept that as part of life.


[2 Points] ShulginsCat:

Is it time to switch to multisig yet?


[1 Points] C4000c:

id say its whether or not the vendor had seen the order otherwise there is no way to prove they made an order on the site that just went down.


[1 Points] DinoNeedsMe:

Isn't this sort of thing why Evo supports multisig transactions? We really ought to push for that to be more prevalent. It basically completely removes this risk.


[1 Points] None:

don't mind me just loading up another hit in my meth pipe .... :)