eBay derivatives market or just an insurance product?

During the past five years, information-based services have become a critical part of business processes in the financial services industry (think fraud protection and anti-money laundering). I can foresee a whole new set of information-based business services being made available as the adoption of enterprise services architectures continue.

One not-so-far-fetched example could involve eBay. Imagine you are purchasing a digital camera on eBay. With the entire historical marketplace data eBay collects on sales of digital camera they could train a predictive model to evaluate the probability of a specific digital camera, selling for less than the amount you have just entered as your maximum bid. Based on very low probability of the camera auction closing at a lower price, eBay could offer a type of price protection insurance to bidders. The insurance coverage and premium would scale up and down based on the results of the historically trained model with all its variables (day, time of day, merchandising options, auction closing rates, and so on) and the real-time marketplace data for other cameras currently being offered. Of course, not every camera being auctioned would qualify for the price protection insurance.

It is this type of real-time adaptability (which auctions qualify for the insurance offer and at what bid prices) that could enable the auction site an opportunity to increase revenue, while not upsetting their sellers with ever-increasing posting fees, and increase buyer satisfaction by providing piece of mind that they are not irrationally overbidding. 

Taking the concept a bit further their could feasibly be a derivatives market for some of the more comoditized categories where puts and calls are sold and bought. Of course this would require market makers but I wouldn't be too suprised to see some auction drop type businesses step up into that role.