REA March encore...

[Exhibitman]

Originally Posted by Metsfan0507

Haha, pretty sure that's the exact point of buyers premium. To make you forget about the total cost when placing a bid.

Excerpt from one of my recent columns:

"There is a substantial social science devoted to understanding how bidders behave, which you can find online readily. It all gets rather complicated and prolix. I boil it down to asking why are auction rules set up the way they are?. ... Why would the auctioneer add a buyer’s premium to the hammer price rather than just selling for the hammer and deducting a commission from it? ... because people don’t think to add the buyer’s premium to the bid in the heat of an auction. Many cannot. It all has to do with how we react to stressful environments. Homo sapiens is not a nice guy; he didn’t get to be the apex predator on this planet by being laid back. We are hard-wired to focus intently and compete with absolute concentration, to the exclusion of other things, when it matters. That last bit is called tunnel vision, and if you ever got into a ring to fight, you know exactly how it feels when the world around you goes fuzzy and slows down and all you see is the guy trying to smack you in the nose. ... The auction format produces stress that taps that primal beast, floods us with the same fight or flight hormones in the heat of the moment, and impairs our rational minds, the place where we do math, so we overbid to achieve the kill, the win. And when we win, we have the same burst of endorphins we experience when we prevail in a fight or conquer an obstacle. Followed shortly afterwards by that “oh f**k” moment when the high dissipates, the math mind turns back on, and we add 35% (buyer’s premium, shipping, and sales tax) to the hammer price and realize that we just set a record price on that card."

[Aquarian Sports Cards]

Originally Posted by Exhibitman

Excerpt from one of my recent columns:

"There is a substantial social science devoted to understanding how bidders behave, which you can find online readily. It all gets rather complicated and prolix. I boil it down to asking why are auction rules set up the way they are?. ... Why would the auctioneer add a buyer’s premium to the hammer price rather than just selling for the hammer and deducting a commission from it? ... because people don’t think to add the buyer’s premium to the bid in the heat of an auction. Many cannot. It all has to do with how we react to stressful environments. Homo sapiens is not a nice guy; he didn’t get to be the apex predator on this planet by being laid back. We are hard-wired to focus intently and compete with absolute concentration, to the exclusion of other things, when it matters. That last bit is called tunnel vision, and if you ever got into a ring to fight, you know exactly how it feels when the world around you goes fuzzy and slows down and all you see is the guy trying to smack you in the nose. ... The auction format produces stress that taps that primal beast, floods us with the same fight or flight hormones in the heat of the moment, and impairs our rational minds, the place where we do math, so we overbid to achieve the kill, the win. And when we win, we have the same burst of endorphins we experience when we prevail in a fight or conquer an obstacle. Followed shortly afterwards by that “oh f**k” moment when the high dissipates, the math mind turns back on, and we add 35% (buyer’s premium, shipping, and sales tax) to the hammer price and realize that we just set a record price on that card."

While I don't dispute that, the reason buyer's premium was started was competition for consignments between Sotheby's and Christie's mainly in the Art realm. Basically they used the "hey we're only charging "x" commission" line, and glossed over (if mentioning at all) this newfangled Buyer's Premium.

Buyers not paying attention, getting caught up in the heat of the moment, etc. was an unlooked-for side bonus as hard as that may be to believe.

[RCMcKenzie]

I dunno, I see this topic on here a lot and am trying to understand better. I agree with PeterS's take that it's not that complicated, but I have participated in thousands of auctions throughout my life from a very early age beginning with going to them with my parents.

If the analogy is boxing, then I'm treating it like Roy Jones Jr., moving around the ring without even thinking about getting hit. To me, auctions are for bargains, and doing the math is all part of the game.

[Snapolit1]

Originally Posted by RCMcKenzie

I dunno, I see this topic on here a lot and am trying to understand better. I agree with PeterS's take that it's not that complicated, but I have participated in thousands of auctions throughout my life from a very early age beginning with going to them with my parents.

If the analogy is boxing, then I'm treating it like Roy Jones Jr., moving around the ring without even thinking about getting hit. To me, auctions are for bargains, and doing the math is all part of the game.

If people’s emotions didn’t easily override logic in the right environment, there would be no such thing as casinos and racetracks.

[RCMcKenzie]

Originally Posted by Snapolit1

If people’s emotions didn’t easily override logic in the right environment, there would be no such thing as casinos and racetracks.

Other than Texas Holdem, I'm not a gambler. If I'm dragged to a casino, I play $5 blackjack and count facecards while the Don Rickles guy glares at me.

I like to watch horseracing, but have never bet more than 10 to win. Everyone is different.

[Exhibitman]

Originally Posted by RCMcKenzie

Other than Texas Holdem, I'm not a gambler. If I'm dragged to a casino, I play $5 blackjack and count facecards while the Don Rickles guy glares at me.

I like to watch horseracing, but have never bet more than 10 to win. Everyone is different.

That's for sure! The bulk of my practice used to be contingency fee construction claims, so my professional life was more than enough of a gamble. When I did go to casinos I preferred games of chance over games of skill, precisely because I didn't want someone looking daggers at me. Watch a blackjack table and then a craps table. The card players look...pissed. The dice players look like they are having fun. I'd rather have a drink, play a few rolls and saunter over to dinner than have to concentrate on strategy and the play of others.

[Epps]

Couldn’t resist a nice T210 MIS cut with fat borders. My first in collecting this set.

Regarding the other T210-8 prices, Series 8 is easily the toughest to collect. I am guessing two guys really needed Dobbs and a few of the others. Some of these are so tough that if you don’t pick them up when you can, you may not see them again for a long, long time. I think that we have seen T210’s slowly rising for some time now.

A183FD2B-0F3C-4484-A61C-C3ED44D7AD2B.jpg

[brianp-beme]

Originally Posted by Snapolit1

If people’s emotions didn’t easily override logic in the right environment, there would be no such thing as casinos and racetracks.

Or as many humans populating our world.

Brian

[BobC]

Originally Posted by Aquarian Sports Cards

While I don't dispute that, the reason buyer's premium was started was competition for consignments between Sotheby's and Christie's mainly in the Art realm. Basically they used the "hey we're only charging "x" commission" line, and glossed over (if mentioning at all) this newfangled Buyer's Premium.

Buyers not paying attention, getting caught up in the heat of the moment, etc. was an unlooked-for side bonus as hard as that may be to believe.

Good point, and also points to the psychological feature to entice and attract more consignors. Think about it, if someone is looking for an AH to sell/auction a card for them, guess who that consignor/seller is more likely to choose if one AH says they only charge the seller say a 15% commission, while the other says they only charge the buyer say a 20% commission? You know that some sellers/consignors will hear that the AH will only be charging the buyer a fee/commission, and think that means they'll end up with more money, and also because they like the idea of no money coming out of their pocket to pay the AH. Truth is, assuming that the buyers are smart and properly do their math and factor in their buyer's premium in the amount they end up bidding, the consignor/seller is actually better off choosing to pay the seller's commission in my example. But as mentioned, many times the buyers also forget about the buyer's premium in the heat of the moment.

[BobC]

Assuming that people will always react and be thinking smartly and rationally...............isn't smart or rational! LOL

[Exhibitman]

Originally Posted by Aquarian Sports Cards

While I don't dispute that, the reason buyer's premium was started was competition for consignments between Sotheby's and Christie's mainly in the Art realm. Basically they used the "hey we're only charging "x" commission" line, and glossed over (if mentioning at all) this newfangled Buyer's Premium.

Buyers not paying attention, getting caught up in the heat of the moment, etc. was an unlooked-for side bonus as hard as that may be to believe.

I don't really buy their justification; trying to gloss over the total size of the commission tells me that they were thinking carefully about how to bamboozle people and that was the driving force. Regardless of the origin of the practice, however, the 'side bonus' is the main reason it persisted and persists.

Don't get me wrong, I am not trashing the right of auctioneers to make a living, I am just searching for the underpinnings of a practice that is harder for people to understand and work with than a straightforward consignor's commission would be and I think that the various practices of auctioneers have been crafted carefully to maximize the outcomes for consignors and themselves. Like it or not, auctioning items is a classic zero-sum game: someone winning means someone else loses. In this case, every bidder who loses track of the math and bids more than he would have otherwise puts money into the pockets of the consignor and auctioneer.