Posted By:
cmoking"what?"
Let's take a card that would sell for $1,000 in an auction. Let's say the transaction costs is about $100. Let's add another cost - call it a "get out of bed" cost of $200. This cost is the effort the seller needs to go through to selling it. Some just don't want to put up the energy. So the owner of the card can have $700 for his card.
Every morning the owner wakes up, he has his choice of $700 or the card. If he elects to keep the card, he is giving up $700 for the card. The $700 is not in his pocket, but it easily can be.
This is not any different than if:
He is not the owner of the card, but he has $700 in his pocket. He wakes up one morning and swaps the $700 for the card. He is $700 poorer, but he owns the card.
In the first scenario where he already owned the card but chose not to sell, he is choosing to own the card rather than take $700.
These two scenarios are the same thing, but phrased differently. At the end of the day, the person has the choice of $700 or the card.
Therefore, if an owner decides not to sell an asset he owns, then he is in effect buying. Transaction costs and 'get out of bed' costs can sometimes be pretty big. That easily stops some people from selling some of their assets. Thus there may be a big difference between the market price and the actual sales...in the example above, I put in a difference of $700 and $1000.
For a $4,000 card, maybe the difference is a $3,000 and $4,000. So if one of the old-time owners has a card that should sell for 4K in an auction, and he chooses not to sell, then he is in effect willing to pay 3K for it.
I know a lot will not agree with this logic. Flame away!