Nice analysis, Howard.
I face this issue all the time because I collect boxing cards and so many of them are either very rare or very rarely transacted. One wrinkle I'd add is to differentiate between condition rarity and absolute rarity, because the latter gives you a hell of a lot more room to extract a maximum price as a seller. If there are lots of examples of a card but you happen to have a very high grade version, you have a condition rarity and you are vulnerable to substitution [the collectors opting for lower grade instead of paying your price], not to mention expansion of the pop at your level if you are talking postwar mainstream issue. If there just aren't any examples of the card, or very few, in any grade, you have an absolute rarity and a total sellers market. That is why I tend to look at previous sales before anything else. If there is no sales history at all for the card in any grade I know it is an absolute rarity and I can set my price and stick to it. One anecdote: I had a truly rare card that someone wanted to buy. I checked for sales on VCP and found that none of them had transacted. No data at all. I googled it too and found no AH listings. Rare card in the most absolute sense. My method for pricing a card like that is to pick a number high enough that I wouldn't feel bad if the card resold for more. I picked my number, the other guy kept trying to cut it down and I finally told him to either take my offer or go find the card somewhere else, and I would auction off the card publicly with my ask as the minimum bid. He took the offer.
I'd also suggest that you decide why you have the card in question and act accordingly. If you are investing or are a dealer, it is like anything else--profit is a function of rate of return not just absolute return. Buy a deal, get your investment out, get your money into the next deal, and so on. That's how you maximize overall profit, not hanging on to inventory. There are some dealers I see every year at the National with the same cards in hand. Some of them have been offering specific cards for a decade. They stick to their prices but the cards never sell and meanwhile inflation eats into their ask price year over year and they pay to transport the items back and forth every year. As a business model, that sucks. Better to forego a piece of a profit and
quickly get your money out and working on other deals. If you are a collector, on the other hand, and you are contemplating a sale of what I call a "core collection" item, my theory in the prior paragraph applies. I didn't want or need to sell the card I referenced; he approached me. That means I do not sell unless I am completely happy with the price.
Another good question to contemplate is whether you would be OK to get stuck with the card. If it is a Honus Wagner or Hank Aaron, not so bad to own a nice rare one, but Billy Cox and Dick Littlefield? Who wants to get stuck with Dick and Cox?
ETA: Yes, I realize I have the mindset and potty mouth of a ten-year-old; I collect friggin' baseball cards.