Quote:
Originally Posted by oldjudge
Do auctions really establish a "market"? Take an example--on a scarce card buyer A is willing to pay up to $10,000 for it. The next best buyer, buyer B, is only willing to pay $6,000 for it. If it goes to auction it will sell for one increment over $6000, say $6250. If sold privately it will sell for $10,000. Now, what's the "market" for the card? I think this illustrates the problem with auctioning off scarce items--the fact that the price is set by the second most aggressive bidder, not the most aggressive bidder.
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+1, Jay. Been beating that drum for a while now.