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

[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.

[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]

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

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

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?

[T206Collector]

Originally Posted by Peter_Spaeth

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

We are getting circular here. First, the article I am citing to and provided above is from 2009. That's the latest Morwitz article. I don't think the article you cited was more recent than that. But, in any event, I am talking about partitioned pricing in the auction environment, which is different than in the standard marketplace for the reasons you have already mentioned. Indeed, the fact that you and a substantial number of Net54 members do not believe they are being tricked means that the strategy may actually be working.

[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)."

[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.

[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.