Hidden reserves disguised as phantom bidding

[Matt]

Originally Posted by scgaynor

As somebody that deals with consignors everyday, I can tell you that collectors tend to hate reserves, unless it is their item being sold, then they are all for them.

Scott - please don't equate with practice with the concept of a reserve. I think most everyone (including bidders) understand the point of a reserve and don't have an issue with it. Hiding the reserve and then making you think you are bidding against another live person is a completely different animal.

[HRBAKER]

Originally Posted by Matt

Scott - please don't equate with practice with the concept of a reserve. I think most everyone (including bidders) understand the point of a reserve and don't have an issue with it. Hiding the reserve and then making you think you are bidding against another live person is a completely different animal.

+1
Agreed

[scgaynor]

Agreed

I was responding more to the comment about bidding in auctions in hopes of getting a bargain.

My comment was not even a negative comment, I was just stating that bidders want an item cheap and sellers want the most that they can get. There is no perfect auction process that guarantees both people are happy.

Higher minimum bids decrease the bidding and usually the price realized. Lower minimum bids foster competitive bidding, which usually brings higher prices in the long run. It is hard to make consignors understand that though because they get scared. Each auctioneer has to make a business decision on how they want to handle that.

The best solution for a bidder is to have some bidding discipline. Set your price and don't go any higher. If you don't hit the reserve, then you were not going to win the item anyway.

Scott

[Mr. Zipper]

Originally Posted by Matt

Scott - please don't equate with practice with the concept of a reserve. I think most everyone (including bidders) understand the point of a reserve and don't have an issue with it. Hiding the reserve and then making you think you are bidding against another live person is a completely different animal.

I think it does matter if the auction house is the phantom bidder. It creates the appearance of at least one other **real** bidder willing to pay a certain price (that is, demand) when it does not really exist. Some might call this market manipulation.

If I am not mistaken, other auction houses such as Heritage do this as well (house bidding.)