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I think for any event card you first pay the cost (or overpay, in this case) and the start resolving its ability (its text). In fact, in the rules (version 1.6) it says that:

"Each time a player plays an event card, that player places it faceup on the table in front of them (the event is not in play), pays its costs, resolves its effects (unless those effects are canceled), and then places the card in its owner’s discard pile after those effects resolve (or are canceled)."

So you first pay and then resolve. Shuffling the cards back in the deck is part of the effect of the card. Paying takes place strictly before. 

Hi @quantumodo,

Thank you for your response. However, the rule you provided only states that you should resolve the effect after paying the cost; it does not clarify whether you should select the targets of that ability before or after paying.

After giving it considerable thought, I still believe that targets should be selected before payment. For example, consider a card that reads:

Action: Shuffle each card in your discard pile into your deck.

You cannot trigger this card if you have no cards in your discard pile, even if you can discard cards to pay for it.

If you have any differing opinions or insights, I would love to hear them.