Heritage Buyers Premium

[raulus]

Originally Posted by Peter_Spaeth

Well, undoubtedly there is some of that, especially very late at night, but I still think for the most part they do understand how their bid will translate into a final price..

I don’t disagree with that concept.

I just think that the math isn’t the most important part of the calculus.

The most important part is the jonesing and coveting.

That and the realization that all of this restraint leads to losing just about every auction, because some other bidder is willing to be less restrained.

[Peter_Spaeth]

Originally Posted by raulus

I don’t disagree with that concept.

I just think that the math isn’t the most important part of the calculus.

The most important part is the jonesing and coveting.

That and the realization that all of this restraint leads to losing just about every auction, because some other bidder is willing to be less restrained.

There is a difference between knowing how much you will have to pay based on your bid, and how much you are willing to pay. The debates about BP usually are about the former; as people have claimed bidders do not take it into account.

[raulus]

Originally Posted by Peter_Spaeth

There is a difference between knowing how much you will have to pay based on your bid, and how much you are willing to pay. The debates about BP usually are about the former; as people have claimed bidders do not take it into account.

Is it possible that you’re both right?

I’m not a psychologist, but when it comes to exceeding the amount that we were willing to pay for an item, my experience is that we come up with rationalizations and ways to fool ourselves into thinking that we’re paying less than we really are. Even though we mathematically know that the BP is there, I think we sometimes choose to conveniently ignore it if it means that we can still feel good about our decision to keep bidding.

[parkplace33]

Originally Posted by raulus

Is it possible that you’re both right?

I’m not a psychologist, but when it comes to exceeding the amount that we were willing to pay for an item, my experience is that we come up with rationalizations and ways to fool ourselves into thinking that we’re paying less than we really are. Even though we mathematically know that the BP is there, I think we sometimes choose to conveniently ignore it if it means that we can still feel good about our decision to keep bidding.

Every time there is a new auction, there are a ton of posts in this board about it. Hell, the opening day of bidding is like a holiday around here.

I know guys say they incorporate the bp into bidding, but if you really want the item, that notion goes out the window.

[Mark17]

Originally Posted by parkplace33

Every time there is a new auction, there are a ton of posts in this board about it. Hell, the opening day of bidding is like a holiday around here.

I know guys say they incorporate the bp into bidding, but if you really want the item, that notion goes out the window.

Yes but this is true when we get outbid also. People I'm bidding against bump the final price I'll have to pay far more than the bp.

Heritage is one of the best at putting the actual cost (bid + bp) in parentheses to inform the bidder of what he's actually committing to spend. So, my conclusion is that with elevated buyers' premiums, the ah wins and the consigner loses, while the bidder is unaffected - the money the winning bidder pays just gets distributed differently between consignor and ah.

[Exhibitman]

Since the commission and the buyer’s premium both are paid to the auctioneer from the proceeds of the sale, they are functionally the same, so why have BP? Why not just take the 22% from the overall gross proceeds? If you’ve read my columns for a while you know my answer: it is a jazz hands misdirect. Labeling it a “buyer’s premium” tends to suggest that it is not a "commission" and that the buyer pays the “buyer’s premium”. That’s a bullshit framing, but a significant percentage of the public falls for it.

[calvindog]

Originally Posted by Exhibitman

Since the commission and the buyer’s premium both are paid to the auctioneer from the proceeds of the sale, they are functionally the same, so why have BP? Why not just take the 22% from the overall gross proceeds? If you’ve read my columns for a while you know my answer: it is a jazz hands misdirect. Labeling it a “buyer’s premium” tends to suggest that it is not a "commission" and that the buyer pays the “buyer’s premium”. That’s a bullshit framing, but a significant percentage of the public falls for it.

I agree. Similarly, why do auction houses only permit bidders to bid on items they put a bid on prior to extended bidding? How does this help either the consignor or bidder?

[Gorditadogg]

Originally Posted by Exhibitman

Since the commission and the buyer’s premium both are paid to the auctioneer from the proceeds of the sale, they are functionally the same, so why have BP? Why not just take the 22% from the overall gross proceeds? If you’ve read my columns for a while you know my answer: it is a jazz hands misdirect. Labeling it a “buyer’s premium” tends to suggest that it is not a "commission" and that the buyer pays the “buyer’s premium”. That’s a bullshit framing, but a significant percentage of the public falls for it.

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