Auction closing methods - individual vs. simultaneous lot closing

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Posted By: Joann

It seems to me that having the entire lot close at the same time is the best for the sellers. If there are X total buyer dollars available to be spread around the entire auction, the single closing time maximizes the probability that many or all of those $X will actually be spent somewhere in the auction.

If single lots close individually, then it's almost assured that $X will not be spent. Someone getting outrun on a lot he wants may look around and see that there is nothing left open that he's interested in, so his money comes out of the pool of $X and now there is less money for the entire auction. I imagine that the single lot closing method leads to dozens or even hundreds of bidders withdrawing b/c they got outbid on something and weren't interested in whatever else happened to still be open.

So even though the auction house can't allocate the dollars or assure an individual seller that keeping the $X pool will affect his lots, they can certainly know that they kept the pool as large as possible for as long as possible by assuring that each one of the $X had somewhere to be spent, right up until final close.

The only people that really benefit from single lot closings are the buyers. They can win something at a lower price if the lot closes while other potential bidders are trying to focus on primary lots.

It also favors buyers that don't want to be up all friggin (@tbob) night trying to win something. That's no small thing, but it's hard to argue that an auction house should diminish its primary duty to maximize seller return just so people can get to bed earlier.

No good answer. Maybe it's to start extended bidding at 10:00 a.m. on a weekend, or something.

Joann