Why to not enter a “Storage War”
Storage auctions allow members of the general public to bid on the contents of a storage locker when a tenant has stopped paying. Potential buyers are allowed to look into the locker from the doorway but are not allowed to go inside or touch anything. It is then the responsibility of the highest bidder to clear out the contents of the locker. Many people go to these auctions attempting to make a profit. They hope that they’re able to buy the locker for less than the actual value of the goods inside.
The hard thing about these auctions is that the buyer doesn’t know his or her true value of the locker. Since the dominant strategy in auctions is often to bid your true value, bidding becomes very difficult. Based on the nature of these auctions, nobody knows his or her true value. Since the contents of the lockers are likely to be sold off by the bidders, true values are probably relatively similar among bidders. However, nobody knows what that value is, and that’s the unique factor these auctions bring.
A general piece of advice, which is noted in this article, is that buyers set a limit on their bid before starting and stick to it. Since buyers’ true values are unknown, this type of auction makes it easy to get carried away and impulsively up your bid more than intended. If buyer A bids price x, that means they think the contents of the locker is worth that much. And since your true values are probably similar due to the fact that most buyers in this situation plan to sell off the contents of the locker, it will tempt you to bid a little more than x. However, buyer A might have been mistaken about something he saw in the locker and though we are naturally inclined to believe the locker may in fact be worth more because of buyer A’s bid, this will only result in us paying a higher price than what we determined would be our true value, which is never a good idea.
Though some are able to excel in this business, such as those on Storage Wars, it is recommended that the average person doesn’t engage in these auctions due to the high risk involved with not knowing true values.
http://www.dailyfinance.com/2011/11/03/the-truth-about-storage-auctions-more-trash-less-treasure/