You can't assume that everyone who buys something knows what the item is worth. In the case of a fixed price sale, a buyer may see an item listed for $1000, have no idea if that's fair, and pass because he does not want to later discover he overpaid badly.
But if he sees the same item in an auction with a bid of $1100, he's not afraid to bid $1200 because he thinks he could probably get nearly all his money out of it down the road.
Of course the answer is much more complicated than this, and I am citing just one aspect of it.
Last edited by barrysloate; 07-11-2013 at 02:01 PM.
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