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

[unamuzd1]

Originally Posted by ccre

I asked when I would receive the refund. They emailed me that I'm getting a "credit" towards future auctions. That's bs!!

Wait - they made an error, so they get to earn interest on our money? Guess I need to scroll through the thread to find the right email address to indicate my thoughts on that.

[glchen]

The thing about ebay is that you often don't know if you're being shilled, and if that's the reason that the prices are higher. For example, I went back and looked at that W511 Ruth from post 261 in this thread. I'm not saying that I know with certainty that the auction was shilled, but some of the bidders are certainly suspect. First, I know the winning bidder in this auction is legit. There is a collector that likes W511 Ruth's, which I've sold to in the past, and the feedback # matches, so I'm pretty sure it's him. However, the underbidders, I'm not so sure about. The direct underbidder with a feedback of 595, is probably legit, but there are so few bids. The second underbidder with the feedback of 649 has a few bid retractions, and a relatively high # of bids for a seller that doesn't really sell a lot of items. However, the third underbidder with the 185 feedback, is very suspect with a huge # of bid retractions. There do not seem to be any snipes that registered in this auction although it looked like the first underbidder did some "manual sniping" at the end of the auction. Therefore, if the 185 feedback bidder did not bid the item up, it is possible that the auction may have ended at a lower price since the last bidders would have been starting from a lower base (assuming additional snipes were not triggered at the lower price). What is for sure is that it is much more difficult to retract bids at AH's than ebay so the shenanigans of the 185 bidder would not have come into play in the Heritage auction.

[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

[Kevin.Shenker]

Originally Posted by unamuzd1

Wait - they made an error, so they get to earn interest on our money? Guess I need to scroll through the thread to find the right email address to indicate my thoughts on that.

If you leave 100.00 in the bank at 1 percent a year. You get 1 dollar at the end of the year.

If you get enough of a percentage to make retaining a fraction of your shipping charge a seriously profitable endeavor, you either have an insane baseball card purchasing budget or you have one hell of a bank you are storing your money at.

[unamuzd1]

Originally Posted by Kevin.Shenker

If you leave 100.00 in the bank at 1 percent a year. You get 1 dollar at the end of the year.

If you get enough of a percentage to make retaining a fraction of your shipping charge a seriously profitable endeavor, you either have an insane baseball card purchasing budget or you have one hell of a bank you are storing your money at.

Not sure if this is a deliberate misinterpretation, but I'm happy to clarify my point.

Any individual's difference in shipping charges will be relatively minor. You'll notice that I did not talk about interest I would not be earning, but very specifically said "they get to earn interest on our money." This was a deliberate wording choice.

If the auction house keeps all those differentials rather than refunding as they said they would, it adds up. It's still trivial in comparison to the amount that they make off the auction as a whole, but as a business practice I would find it objectionable. In fact, the relative triviality is probably why I'd find it objectionable.

I get that it's clearly not a big deal to you. This is my first purchase from one of the "big" auction houses. How I get treated is a big deal to me. They impressed me by so quickly addressing the over-charge problem on shipping. I'm hoping what the poster up-thread was told was the result of some miscommunication within HA about how things were being handled, since "refund" was part of their email to affected bidders.

But, being that this is the internet, and being that I'm a cynical sort, that hope was not what guided my first response.

[begsu1013]

Originally Posted by ls7plus

Absolutely +1.

Right on, Peter.

Highest regards,

Larry

-1

[Kevin.Shenker]

Not trying to sound like I am debating you.

I don't think it was a misinterpretation rather than an inverse of what you said.

The way you worded what you said, you sounded upset that you were the one not able to make the money in interest, because they were, as they are holding your funds in their account as a positive balance/credit.

I would say that even if they held everyone's money it probably wouldn't equate to a whole lot of cash in interest.

Even if you add them all up it is trivial. Lets go big or go home. If they held a whopping 100,000 in cash, at 1 percent in a whole year they would make 1000.00.

Without even thinking to much about it, it has got to be no where near that big of a mistake. So what are they going to actually profit? Next to nothing after they are done dealing with refunds for those who want them.

100 bucks? Probably not after the cost of providing refunds lot by lot out which would outweigh any profits they would make. In fact to you use your credit you may by more.

Not saying it is a perfect answer, but that is my take on the decision.

[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.

[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?

[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 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?

[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.

[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..

[nolemmings]

Well isn't that just as irrational? If a card sells for $100 with a 20% BP, the consignor gets $100 and the AH $20. If there's no BP and the buyer still bids and pays $120, the consignor gets $100 and the AH gets $20 (assuming 1/6 fee to consignor). Isn't it rather silly to call out bidders who don't want to pay BP and say it makes no difference but not criticize consignors for the same lapse in logic if there is no BP and prices increase to where the buyer is paying the same price?

BTW Al Jurgela, congrats on that Matty--I can't stop staring at it.

[1952boyntoncollector]

Originally Posted by nolemmings

Well isn't that just as irrational? If a card sells for $100 with a 20% BP, the consignor gets $100 and the AH $20. If there's no BP and the buyer still bids and pays $120, the consignor gets $100 and the AH gets $20 (assuming 1/6 fee to consignor). Isn't it rather silly to call out bidders who don't want to pay BP and say it makes no difference but not criticize consignors for the same lapse in logic if there is no BP and prices increase to where the buyer is paying the same price?

BTW Al Jurgela, congrats on that Matty--I can't stop staring at it.

it all adds up to the same thing..people include what the bp in their bids..

and on ebay..sellers factor into the ebay fees.......

it doesnt need to make sense...whatever the consignor wants goes.....some auctions houses give the consignor some of the buyers premium as well......

[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.

[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.

[iowadoc77]

Originally Posted by T206Collector

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.

Amen to the irrational behavior at 2am! I am a numbers in my head guy and when bidding, i always do the 20% math mental add-on. I must confess, however, that I have also been guilty of buying the same card twice in an auction unintentionally due to the above-mentioned sheer exhaustion at 2am. Auctions bring out irrational behavior in collectors. They just do. I have tried to figure it otherwise, but they just do. Very interesting thread. Thanks to all who have contributed.

[Peter_Spaeth]

Auctions would bring out the same irrational behavior at 2AM whether the premium was explicitly calculated in or not. Heritage does the math for you, but I don't see their prices hurting. According to Paul's Wikipedia psychology they should be doing worse than AH's that allegedly "hide" the premium.

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand this very simple concept.

[Gradedcardman]

Originally Posted by Peter_Spaeth

Auctions would bring out the same irrational behavior at 2AM whether the premium was explicitly calculated in or not. Heritage does the math for you, but I don't see their prices hurting. According to Paul's Wikipedia psychology they should be doing worse than AH's that allegedly "hide" the premium.

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand the very simple concept.

I bid a lot in the AH's. The BP is listed in the auction summary. I do the math and I bid if it makes sense. 10%, 15% or 20%, Its simple math.

[iowadoc77]

Originally Posted by Gradedcardman

I bid a lot in the AH's. The BP is listed in the auction summary. I do the math and I bid if it makes sense. 10%, 15% or 20%, Its simple math.

It is simple math. It is clearly spelled out. Take it or leave it, it is there and it is not going away. If it is too big of a deal, cards need to be purchased elsewhere. Pretty simple really

[Econteachert205]

I agree that at a major sports auction with high end items and sophisticated collectors the prices will equal out no matter the buyers premium. I am not a high end collector and was giving my opinion based on the lower end perspective.


I was also speaking to auctions attended in person, not online where the Bp is factored for you.

[begsu1013]

Originally Posted by Peter_Spaeth

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand this very simple concept.

yep.

[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.

[Sean]

Originally Posted by Gradedcardman

I bid a lot in the AH's. The BP is listed in the auction summary. I do the math and I bid if it makes sense. 10%, 15% or 20%, Its simple math.

+1

Of the four most valuable cards that I own,three of them were bought from AHs. And I always knew how much I was bidding with the BP.

[T206Collector]

Whether all, some, or most collectors choose to include the BP in their bidding activities, the auction houses that separate the BP from the bid are trying to anchor the bids at a lower value than what is being spent so as to encourage additional bidding. It is a ploy. Whether it works or not is in the eye of the beholder.

[Peter_Spaeth]

Originally Posted by T206Collector

Whether all, some, or most collectors choose to include the BP in their bidding activities, the auction houses that separate the BP from the bid are trying to anchor the bids at a lower value than what is being spent so as to encourage additional bidding. It is a ploy. Whether it works or not is in the eye of the beholder.

And your evidence for this is?? Your say-so? And if you are accusing auction houses of attempted deception, why don't you name the ones you think are guilty?

[nolemmings]

I don't have any problem following the logic of his argument Peter, with or without empirical data to back it up. Again, if the BP has no influence on final price or bidder's behavior, why is it that no auction house, as in none, does away with it and take its cut from the seller/consignor? Consignors really should have no rational problem with that if their bottom line is the same right?

[Peter_Spaeth]

Originally Posted by nolemmings

I don't have any problem following the logic of his argument Peter, with or without empirical data to back it up. Again, if the BP has no influence on final price or bidder's behavior, why is that no auction house, as in none, does away with it and take its cut from the seller/consignor? Consignors really should have no rational problem with that if their bottom line is the same right?

Industry custom and practice, Todd. Nothing to do with trying to deceive buyers. As I recall seller's premiums used to be much more in vogue. At some point someone probably had the notion that they could compete for consignments better by advertising a lower seller's premium and others followed suit. That is what this article from an art site suggests, even though of course the issue for the consignor really is the total premium not the seller's premium.

"The buyer's premium is the fee added to the hammer price at auction, but don't be fooled by the term - it's really paid by the seller. Buyers decide how much they want to pay, and take off the premium to work out the maximum hammer price they're willing to bid. If the buyer's premium increases, they compensate by reducing the hammer price they are willing to pay. If a dealer is willing to pay £20k for a picture bought directly from a collector, they're not going to pay £25k for the same picture from auction because there's a 25% premium - the dealer can't sell for a higher price just because they had to pay a buyer's premium.




The seller is paying for the auction house for its services. A higher buyer's premium means that the seller will receive less of the proceeds - so if you're selling through an auctioneer, focus as much on the buyer's premium as on the seller's premium. Over the past few decades there has been a shift from charging seller's premium to charging buyer's premium. Indeed, the average premium income at Sotheby's (buyer's premium plus seller's premium) was just 16.6% in 2011 and 16.3% in 2012, according to their annual report (p.25). Sellers sometimes even pay a negative premium - i.e. they will receive a share of the buyer's premium. Christie's doesn't publish these data because it is privately owned, but I suspect theirs is a bit higher because they sell more lower-valued lots that attract a higher premium.




The shift to buyer's premium has been driven by competition to win consignments. Buyers can't negotiate - it makes no sense to agree a deal where the buyer pays a low premium, but the underbidder would have been charged the full premium. Negotiation takes place with sellers."

[aljurgela]

Thanks Todd... looking forward to getting the Matty in hand. Should be here tomorrow!

Al

[ALR-bishop]

If I was an auctioneer I would separate it, whatever the level, to show the seller he will get the full amount bid. But I am just a buyer and the premium does not matter to me as long as I know what it is. I am not trying to convince anyone this is the best way to look at it. It's just how I look at it. Not sure there is a right or wrong answer here. To each their own way of looking at it

[T206Collector]

Originally Posted by Peter_Spaeth

And your evidence for this is?? Your say-so? And if you are accusing auction houses of attempted deception, why don't you name the ones you think are guilty?

Seriously? Well, okay. Here's some basic research and empirical data on the topic:

"Morwitz et al. (1988) found that auction bidders agreed to pay more in total cost in an auction when a 15 percent buyer's premium was charged separately than in one in which there was no buyer's premium. The anchoring effect observed in partitioned pricing has subsequently been replicated and extended in several studies (e.g., Bertini and Wathiey, 2008; Chakravarti et al., 2002)" For complete citations, click here:

https://books.google.com/books?id=22...horing&f=false

[T206Collector]

The entire Morwitz article is available here:

http://www.researchgate.net/publicat...tioned_Pricing

[Peter_Spaeth]

The starting point of our investigation has been the fact that the
authors of existing studies on effects of price partitioning came up
with contradictious findings. Our study was intended to have a
closer look at the mechanisms which underlie price partitioning
effects. The results of our study show that price partitioning leads
to a more favorable evaluation of the total price level, but to a higher
perceived complexity of the price structure and to a higher perceived
manipulative intent of the marketer than does using total
prices. The overall effect of price partitioning on product evaluation
proved to be negative compared to using total prices which is due
to the fact that the negative effects of price partitioning through
perceived complexity of the price structure and manipulative intent
outweigh the positive effect through the evaluation of the total price
level. The contradictious findings of previous studies might be
traced back to the fact that the authors did not analyze all of these
paths. Thus, summing up our results, we can say that marketers
should not use partitioned prices because the disadvantages of this
pricing technique outweigh the advantages. Provided that a marketer
has to use partitioned prices for some reason (e.g. because
partitioned prices are common or regulated by law in his industry),
we can derive from our findings that monetary surcharges should be
preferred over percentage surcharges because when applying monetary
surcharges, prices are perceived as being less complex and the
marketer is supposed to have a lower manipulative intent than in the
case of percentage surcharges.
http://www.acrwebsite.org/volumes/v3...r_vol35_30.pdf

[Econteachert205]

So doesn't that mean they shouldn't use buyers premiums because Morons like me think we're being ripped off by it?

[T206Collector]

Originally Posted by Peter_Spaeth

The starting point of our investigation has been the fact that the
authors of existing studies on effects of price partitioning came up
with contradictious findings. Our study was intended to have a
closer look at the mechanisms which underlie price partitioning
effects. The results of our study show that price partitioning leads
to a more favorable evaluation of the total price level, but to a higher
perceived complexity of the price structure and to a higher perceived
manipulative intent of the marketer than does using total
prices. The overall effect of price partitioning on product evaluation
proved to be negative compared to using total prices which is due
to the fact that the negative effects of price partitioning through
perceived complexity of the price structure and manipulative intent
outweigh the positive effect through the evaluation of the total price
level. The contradictious findings of previous studies might be
traced back to the fact that the authors did not analyze all of these
paths. Thus, summing up our results, we can say that marketers
should not use partitioned prices because the disadvantages of this
pricing technique outweigh the advantages. Provided that a marketer
has to use partitioned prices for some reason (e.g. because
partitioned prices are common or regulated by law in his industry),
we can derive from our findings that monetary surcharges should be
preferred over percentage surcharges because when applying monetary
surcharges, prices are perceived as being less complex and the
marketer is supposed to have a lower manipulative intent than in the
case of percentage surcharges.
http://www.acrwebsite.org/volumes/v3...r_vol35_30.pdf

I agree, of course, that "the marketer is supposed to have a lower manipulative intent than in the case of percentage surcharges," but I was talking about using partitioned pricing in the auction environment. The Morwitz study cited above referenced an auction study. Whether partitioned pricing has a negative effect on the market in most other contexts is irrelevant. Frankly, if partitioned pricing worked in the grocery store then what you would see would be buyer's premium's at checkout! Imagine that!

[T206Collector]

Originally Posted by Econteachert205

So doesn't that mean they shouldn't use buyers premiums because Morons like me think we're being ripped off by it?

At the grocery store, yes. But, in the auction market the evidence is to the contrary.

[chernieto]

Originally Posted by Peter_Spaeth

http://www.acrwebsite.org/volumes/v3...r_vol35_30.pdf

please make it stop.jpg


& Congrats to Leon on the auction as well ( and the bidders).

Paul

[Econteachert205]

Originally Posted by T206Collector

At the grocery store, yes. But, in the auction market the evidence is to the contrary.

Hahaha. I really think a big part of it is the two worlds of auctions. I have always hung around auctions where a few hundred dollars is a lot of money. Unsophisticated junk dealer types and middle class moms looking for collectibles. I get that at the high end people get what the overall cost is.


By the way, sophisticated investors understand brokerage fees but retail folks sure do not.

[Peter_Spaeth]

One 1988 or whatever it was study of one auction doth not science make. And i see no reason why the newer study wouldn't apply to auctions, buying is buying. In any event, I do not believe that buyer's premiums are charged by sports auction houses with an intent to manipulate the buyer into bidding more. I think it's much more likely a response to a trend which saw auction houses trying to compete by lowering seller's commissions, however irrational that was. Paul if you think otherwise, why don't you name the ones you think are trying to trick us? Or do you think it's all of them, making a conscious choice to try to trick us?

[T206Collector]

More from the 2009 Morwitz article, which is really fascinating reading:

With respect to eBay strategies...

"While the results varied for high versus low total reserves, across the two products, and across particular CDs and games, in general they demonstrated that auctions with lower opening bids and higher shipping charges attracted more bidders, and generated higher total revenues, compared to higher opening bids and lower shipping charges. For example, setting an opening bid of $0.01 and shipping of $3.99 for CDs resulted in a higher average number of bidders (4.5) and revenue ($10.14) than setting an opening bid of $4.00 and no shipping charges (3.9 bidders, $7.54 average revenue)."

[T206Collector]

Originally Posted by Peter_Spaeth

One 1988 or whatever it was study of one auction doth not science make. And i see no reason why the newer study wouldn't apply to auctions, buying is buying. In any event, I do not believe that buyer's premiums are charged by sports auction houses with an intent to manipulate the buyer into bidding more. I think it's much more likely a response to a trend which saw auction houses trying to compete by lowering seller's commissions, however irrational that was. Paul if you think otherwise, why don't you name the ones you think are trying to trick us? Or do you think it's all of them, making a conscious choice to try to trick us?

Honestly, I view our argument as a waste of time. But, I have enjoyed finding substantial empirical evidence to show the impact of price partitioning, which many of us on Net54 intuitively knew was going on. Frankly, I am not sure why you would take such a strong position to the contrary. I don't get it. But, then, I don't care.

[Peter_Spaeth]

Originally Posted by T206Collector

More from the 2009 Morwitz article, which is really fascinating reading:

With respect to eBay strategies...

"While the results varied for high versus low total reserves, across the two products, and across particular CDs and games, in general they demonstrated that auctions with lower opening bids and higher shipping charges attracted more bidders, and generated higher total revenues, compared to higher opening bids and lower shipping charges. For example, setting an opening bid of $0.01 and shipping of $3.99 for CDs resulted in a higher average number of bidders (4.5) and revenue ($10.14) than setting an opening bid of $4.00 and no shipping charges (3.9 bidders, $7.54 average revenue)."

I would think (or hope anyhow) that the sophistication of people spending hundreds or thousands of dollars in high end sports auctions is a little higher than people buying 10 dollar items on ebay. This thread could prove me wrong though.

[Peter_Spaeth]

Originally Posted by T206Collector

Honestly, I view our argument as a waste of time. But, I have enjoyed finding substantial empirical evidence to show the impact of price partitioning, which many of us on Net54 intuitively knew was going on. Frankly, I am not sure why you would take such a strong position to the contrary. I don't get it. But, then, I don't care.

For the plain and simple reason that I have more faith in the intelligence of our community than you do. As a result, I do not believe that sports auction houses who understand the intelligence of their market charge buyer's premiums with the intent of tricking people into spending more money. Are you saying that is Leon's intent? Al's? Lee's? They charge BPs after all. In other market segments, notwithstanding the newer research showing it is an unsuccessful strategy, maybe that is the intent. I don't believe it is here. It's just my opinion.

I agree with you the research as a whole is interesting, though.

[T206Collector]

Originally Posted by Peter_Spaeth

I would think (or hope anyhow) that the sophistication of people spending hundreds or thousands of dollars in high end sports auctions is a little higher than people buying 10 dollar items on ebay. This thread could prove me wrong though.

I wasn't arguing with you. I thought it was an interesting study on ebay auction behavior, since many of us participate in ebay auctions.

As you can probably tell, I enjoy reading about buyer and selling behavior in auction formats since I participate in so many different auctions.

I would guess most auction houses will tell you that they separate the buyer's premium from the hammer price in order to reward their consignors by taxing the buyer. But, there is significant empirical evidence that such practices actually drive final costs up, and that the auction houses are well aware of that. Frankly, enough articles have been written about it to fill a small library.

[T206Collector]

Originally Posted by Peter_Spaeth

For the plain and simple reason that I have more faith in the intelligence of our community than you do.

I've taken part in anchoring surveys with a group of intelligent folk. We all fall for the same tricks every time. It's more of a human nature thing than an intelligence thing.

[Peter_Spaeth]

Originally Posted by T206Collector

I've taken part in anchoring surveys with a group of intelligent folk. We all fall for the same tricks every time. It's more of a human nature thing than an intelligence thing.

Then do you discount the newer study suggesting that the very perception that it is a trick renders the strategy ultimately unsuccessful?