The Leon Luckey Type Card Collection – Bidding Ends on Thursday - August 13, 2015

[ls7plus]

Originally Posted by Peter_Spaeth

Any intelligent bidder understands this, I am not sure why you don't Bob. But to repeat what Tom just said, and what has been said countless times, take the fee into account when deciding how much you want to bid. It's that simple. It affects the consignor not the bidder.

Absolutely +1.

Right on, Peter.

Highest regards,

Larry

[begsu1013]

Originally Posted by ls7plus

Absolutely +1.

Right on, Peter.

Highest regards,

Larry

-1

[Econteachert205]

On the topic of buyers premium:

I do agree that as a buyer you simply factor this into your final price before hand as a matter of fact. That still doesn't mean that as a buyer I don't think about the size of the buyers premium. For instance I would rather have a 10 percent buyers premium rather than 20. Before you tell me the item in the 10 percent premium auction will simply sell for 10 percent more in the final bidding, as a former worker at an auction let me just say NO, NO. I worked at a general antiques auction with a flat 10 percent buyers premium. I also went regularly to auctions in the same area with higher buyers premiums at 15-20 percent. The prices almost never correlated in terms of factoring in buyers premium, often the same item would sell for the same exact price in both auctions. Given that wouldn't you rather start out 10 percent in the hole as opposed to 20?

[Orioles1954]

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

[T206Collector]

Originally Posted by Orioles1954

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

[Peter_Spaeth]

Originally Posted by T206Collector

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

That is an absurd argument, particularly where many AHs remind you of the premium at the time you bid either by doing the math for you or by having a parenthetical saying not including buyer's premium.

[T206Collector]

Originally Posted by Peter_Spaeth

That is an absurd argument, particularly where many AHs remind you of the premium at the time you bid either by doing the math for you or by having a parenthetical saying not including buyer's premium.

It's called anchoring, and I suggest all auction bidders read up on it. It's really interesting. From Wikipedia:

"Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth."

Auction houses do the same thing by hiding the BP away from the bid price. The bid price is the "anchor." The BP is irrationally adjusted away. And then the AH immediately flips their numbers to include the BP when they're promoting how big their sales are. It's so obvious why they do that I frankly find it "absurd" that you think all customers treat a straight combined bid/BP number (ebay format) the same as one which hides the ball/BP in their Auction Rules page. Auctions are impulse buy markets, where people are not making the most rationale buying decisions to begin with. It only takes one irrationale participant to drive a price up.

If you make people do multiplication in their heads in a 20-minute extended bidding period at 2am, you will get irrational behavior. That's why you see 19.5% BPs instead of 20%. It makes it less palatable to do the actual math. Quick -- what's 1.195 x $1,900? Most bidders know their number will bring them over $2,000, but some won't realize or care that it's $2,270.50 until they get the invoice. Others will do the 20% calculation in their heads to get to $2,280 and then take an irrational discount in their heads to account for the 0.5% discount, which "saved" them all of $9.50 on a $2,000+ purchase.

Again, it's a form of anchoring, which is a very common way to set prices. E.g., $19.99 seems like way less than $20 to most in TV ads.

[Orioles1954]

Originally Posted by T206Collector

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

People don't like to lose and they get emotionally invested in an item that they bid on. Honestly, I would estimate the majority approach auctions in such a way.

[Peter_Spaeth]

Originally Posted by Orioles1954

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

How do you know it isn't the sense of overall value that goes out the window?

[4815162342]

Originally Posted by Econteachert205

On the topic of buyers premium:

I do agree that as a buyer you simply factor this into your final price before hand as a matter of fact. That still doesn't mean that as a buyer I don't think about the size of the buyers premium. For instance I would rather have a 10 percent buyers premium rather than 20. Before you tell me the item in the 10 percent premium auction will simply sell for 10 percent more in the final bidding, as a former worker at an auction let me just say NO, NO. I worked at a general antiques auction with a flat 10 percent buyers premium. I also went regularly to auctions in the same area with higher buyers premiums at 15-20 percent. The prices almost never correlated in terms of factoring in buyers premium, often the same item would sell for the same exact price in both auctions. Given that wouldn't you rather start out 10 percent in the hole as opposed to 20?

I don't think your experience at a general antiques auction is comparable to a big sports AH.

For goodness sakes, with easy-to-use sites like Heritage, which display the bid amount w/BP right next to the bid amount, how can anyone be confused about this?

[Peter_Spaeth]

Originally Posted by 4815162342

I don't think your experience at a general antiques auction is comparable to a big sports AH.

For goodness sakes, with easy-to-use sites like Heritage, which display the bid amount w/BP right next to the bid amount, how can anyone be confused about this?

Daryl nobody is confused except maybe Bob, and even if they were, they would at most make a single mistake and not repeat it ever again after they saw the premium tacked on.

[nolemmings]

Maybe this has been explained before and I'm just tired, but I am curious to know why an AH doesn't just skip the buyer's premium altogether and take their 1/6 share from the final hammer price. If buyers are already aware of BPs and adjust their max bids accordingly, presumably their max bids would increase once free of BPs. If the ultimate price with BP is the same as without it, and buyers don't care who gets what split of their money, then it should make no difference, right? On the other hand, if, for whatever reason and in spite of logic buyers don't like BPs and withhold participation for that strange (IMO) reason, then they will bid more and the hammer price would be higher without them.

IOW, if the BP doesn't make any difference and bidders ultimately pay the same max price with or without it, then why won't an AH try it the other way and charge no BP, agreeing instead to take its cut from the consignor's share?

[1952boyntoncollector]

Originally Posted by nolemmings

Maybe this has been explained before and I'm just tired, but I am curious to know why an AH doesn't just skip the buyer's premium altogether and take their 1/6 share from the final hammer price. If buyers are already aware of BPs and adjust their max bids accordingly, presumably their max bids would increase once free of BPs. If the ultimate price with BP is the same as without it, and buyers don't care who gets what split of their money, then it should make no difference, right? On the other hand, if, for whatever reason and in spite of logic buyers don't like BPs and withhold participation for that strange (IMO) reason, then they will bid more and the hammer price would be higher without them.

IOW, if the BP doesn't make any difference and bidders ultimately pay the same max price with or without it, then why won't an AH try it the other way and charge no BP, agreeing instead to take its cut from the consignor's share?

Because consignors dont want money taken out of the purchase price.....
.its about the consignors not the bidders...also this is classic talk about 'user fee' versus general tax ..people dont mind paying 'tax' or in this case a 'bp' when its for s specific service..

[begsu1013]

Originally Posted by nolemmings

Maybe this has been explained before and I'm just tired, but I am curious to know why an AH doesn't just skip the buyer's premium altogether and take their 1/6 share from the final hammer price. If buyers are already aware of BPs and adjust their max bids accordingly, presumably their max bids would increase once free of BPs. If the ultimate price with BP is the same as without it, and buyers don't care who gets what split of their money, then it should make no difference, right? On the other hand, if, for whatever reason and in spite of logic buyers don't like BPs and withhold participation for that strange (IMO) reason, then they will bid more and the hammer price would be higher without them.

IOW, if the BP doesn't make any difference and bidders ultimately pay the same max price with or without it, then why won't an AH try it the other way and charge no BP, agreeing instead to take its cut from the consignor's share?

because the good Peter'th says so. that's why. and that's all that matters. His words are scripture and there is no denying this.

for Pete's sake / for christ's sake. this is not by coincidence.

sheesh, all 100,002 of us know that.