Why are auctions so popular?

[barrysloate]

Here is something that has been bugging me for a while ( and when was the last time I started a thread?):

We have countless threads and discussions about auctions being shilled. From ebay to major auction houses, it seems like a daily occurrence. Whether it's the auction house doing the bumping, or the consignor, collectors are becoming more and more fed up with the whole process.

So why are auctions so popular? They all go on way too late, many well into the next day, prices are generally sky high with bidders always complaining they paid too much, so why isn't direct sale more popular? It seems like two reasonable people could come up with a fair price over a ten minute phone call. Instead, collectors will stay up until 5:00 o'clock in the morning to overpay for something that they might have gotten cheaper in a private sale.

And yet it feels like a new auction house pops up every week. And direct sales seem to be in decline. Does this make any sense?