$1.26 Million for a Comic Book – Analysis through Auction Theory
In the world of comic book collecting, there are few comic books that are more esteemed and sought after than Marvel Comics Issue One. This comic, first published in 1939, is considered one of the most important comic books to ever be published as it sparked the universe which would be home to notable superheroes such as Spiderman, the Hulk, and Wolverine. It is truly the big bang of the Marvel Universe. Yet, due to the small amount originally published and the product being originally marketed to children who did not foresee what the book would become, the number of issues of this comic which remain in good condition can be counted on your own two hands. When an issue of the comic was announced to be going to auction with a grade of 9.4 out of 10, the best condition ever found, the comic book world came to a standstill. Everyone wanted to know what it would sell for. No one could predict what would occur.
The book was to be sold by Heritage Auctions, an auction house famous for holding some of the world’s most prestigious auctions. This auction house utilizes the first-price style. As discussed in class, the best strategy in this form of auction is to bid somewhat below your true value of the item. This is as if you bid your true value in this auction, your net gain is 0. The style Heritage Auctions varies slightly from what was discussed in class as it begins as a sealed-bid auction but then transitions into an open style. This works by bidders first placing their maximum bids. Then, the auction begins. The price incrementally increases, with live bidders placing their bids. If a maximum bid is greater than a live bid when a call expires, the price of the item automatically increases. This adds a new layer of complexity to the auction as bidders are able to go over their predetermined maximum bid if they are beaten.
In the case of this auction, the item sold for a whopping $1.26 million. Although it was
not revealed, I would assume, based off of the information learned in class, this was somewhat below the maximum bid submitted. This is as the item sold in a first-price auction. What is interesting though and may contradict what we learned in class is the fact that this item was valued objectively at $720,000 by the most well known comic book pricing company, Overstreet. This piece of information is what caused me to engage with this story as it shows that the true “value” of an item can vary significantly, as discussed in class. Multiple buyers can have extremely different values for an item, this number influenced by factors that cannot be quantified such as sentimental connection.
A final interesting piece of this auction which I find perplexing is the fact that since this auction, the “value” of the item has increased as the Marvel Universe has continued to rise in prominence in popular culture. Due to this popularity, it could undoubtedly sell at auction for over $2 million dollars today, as emphasized by other important issues skyrocketing in value. Despite this, it remains in a private collection. With this knowledge, there are three possibilities. The first is that the buyer initially valued the item at this higher value and underpaid, winning the auction and gaining a surplus. The second is that the buyer’s value for the item has increased with time. Finally, it is possible the buyer is now “losing” money as his value for the item has not increased although the item’s value has increased. In either situation, the buyer continues to have significant network exchange, with millions of potential buyers for a single fortunate seller.
https://www.ha.com/c/ref/auction-types.zx