Posted By:
Corey R. ShanusAuction houses don't take 40%. 25%-30% I would say is more typical, which roughly represents the spread between wholesale and retail. And for really special items, I would think the spread potentially could be much greater (both due to (i) auction houses being willing to lower their seller's premium to attract great consignments, and (ii) bidding wars being more likely for the really great items), thus creating tremendous economic incentive to auction those items.
In regard to who "wins" in an auction format, I don't agree a win-win-win scenario violates any economic theory. Indeed, to go one step further, if it did, then I would think eventually market forces would kill it because unless on average all participants show economic gain, why would they stay in the game?