The Leon Luckey Type Card Collection – Bidding Ends on Thursday - August 13, 2015

[Orioles1954]

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

[T206Collector]

Originally Posted by Orioles1954

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

[Peter_Spaeth]

Originally Posted by T206Collector

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

That is an absurd argument, particularly where many AHs remind you of the premium at the time you bid either by doing the math for you or by having a parenthetical saying not including buyer's premium.

[T206Collector]

Originally Posted by Peter_Spaeth

That is an absurd argument, particularly where many AHs remind you of the premium at the time you bid either by doing the math for you or by having a parenthetical saying not including buyer's premium.

It's called anchoring, and I suggest all auction bidders read up on it. It's really interesting. From Wikipedia:

"Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth."

Auction houses do the same thing by hiding the BP away from the bid price. The bid price is the "anchor." The BP is irrationally adjusted away. And then the AH immediately flips their numbers to include the BP when they're promoting how big their sales are. It's so obvious why they do that I frankly find it "absurd" that you think all customers treat a straight combined bid/BP number (ebay format) the same as one which hides the ball/BP in their Auction Rules page. Auctions are impulse buy markets, where people are not making the most rationale buying decisions to begin with. It only takes one irrationale participant to drive a price up.

If you make people do multiplication in their heads in a 20-minute extended bidding period at 2am, you will get irrational behavior. That's why you see 19.5% BPs instead of 20%. It makes it less palatable to do the actual math. Quick -- what's 1.195 x $1,900? Most bidders know their number will bring them over $2,000, but some won't realize or care that it's $2,270.50 until they get the invoice. Others will do the 20% calculation in their heads to get to $2,280 and then take an irrational discount in their heads to account for the 0.5% discount, which "saved" them all of $9.50 on a $2,000+ purchase.

Again, it's a form of anchoring, which is a very common way to set prices. E.g., $19.99 seems like way less than $20 to most in TV ads.

[iowadoc77]

Originally Posted by T206Collector

It's called anchoring, and I suggest all auction bidders read up on it. It's really interesting. From Wikipedia:

"Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth."

Auction houses do the same thing by hiding the BP away from the bid price. The bid price is the "anchor." The BP is irrationally adjusted away. And then the AH immediately flips their numbers to include the BP when they're promoting how big their sales are. It's so obvious why they do that I frankly find it "absurd" that you think all customers treat a straight combined bid/BP number (ebay format) the same as one which hides the ball/BP in their Auction Rules page. Auctions are impulse buy markets, where people are not making the most rationale buying decisions to begin with. It only takes one irrationale participant to drive a price up.

If you make people do multiplication in their heads in a 20-minute extended bidding period at 2am, you will get irrational behavior. That's why you see 19.5% BPs instead of 20%. It makes it less palatable to do the actual math. Quick -- what's 1.195 x $1,900? Most bidders know their number will bring them over $2,000, but some won't realize or care that it's $2,270.50 until they get the invoice. Others will do the 20% calculation in their heads to get to $2,280 and then take an irrational discount in their heads to account for the 0.5% discount, which "saved" them all of $9.50 on a $2,000+ purchase.

Again, it's a form of anchoring, which is a very common way to set prices. E.g., $19.99 seems like way less than $20 to most in TV ads.

Amen to the irrational behavior at 2am! I am a numbers in my head guy and when bidding, i always do the 20% math mental add-on. I must confess, however, that I have also been guilty of buying the same card twice in an auction unintentionally due to the above-mentioned sheer exhaustion at 2am. Auctions bring out irrational behavior in collectors. They just do. I have tried to figure it otherwise, but they just do. Very interesting thread. Thanks to all who have contributed.

[Peter_Spaeth]

Auctions would bring out the same irrational behavior at 2AM whether the premium was explicitly calculated in or not. Heritage does the math for you, but I don't see their prices hurting. According to Paul's Wikipedia psychology they should be doing worse than AH's that allegedly "hide" the premium.

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand this very simple concept.

[Gradedcardman]

Originally Posted by Peter_Spaeth

Auctions would bring out the same irrational behavior at 2AM whether the premium was explicitly calculated in or not. Heritage does the math for you, but I don't see their prices hurting. According to Paul's Wikipedia psychology they should be doing worse than AH's that allegedly "hide" the premium.

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand the very simple concept.

I bid a lot in the AH's. The BP is listed in the auction summary. I do the math and I bid if it makes sense. 10%, 15% or 20%, Its simple math.

[begsu1013]

Originally Posted by Peter_Spaeth

And Bob you can try to personalize this to me but it isn't me at all, it's the overwhelming majority of people who understand this very simple concept.

yep.

[Orioles1954]

Originally Posted by T206Collector

+1

If it didn't get ignored then the auction houses wouldn't use it, and would just deduct a percentage from the final bid to take away from the consignor. Stated another way, when you placed your bid you'd see the actual cost when you clicked the button, as opposed to a lesser pre-premium cost.

People don't like to lose and they get emotionally invested in an item that they bid on. Honestly, I would estimate the majority approach auctions in such a way.

[Peter_Spaeth]

Originally Posted by Orioles1954

I've seen it happen time and time again. In the heat of auction battles, the sense of a buyers premium often goes out the window.

How do you know it isn't the sense of overall value that goes out the window?