The Strategy of Auctions: Baseball Style
This article, just released by Forbes a few hours ago, informs the public of a once in a lifetime auction that will take place next week. This auction, being held at Christie’s in NYC (a famous auction house), will include nearly 500 items from baseball’s history that is expected to sum to over $5 million. The list of memorabilia that will be auctioned off includes a bat belonging to “Shoeless” Joe Jackson, an autographed, single-signed baseball used by Jackie Robinson, and hundreds other pieces of baseball history dating back to the 1860s.
As someone who grew up with a die-hard baseball memorabilia maniac of a brother, I understand the desire to participate in these kinds of auctions. His childhood room was filled with signed baseballs, bats, photographs, even sweaty towels that this auction would surely bring back those obsessive memories. And for anyone who has a similar interest in these kinds of items, this auction would get them excited and would most definitely get them reading the article, which is interestingly written and the actual point of this blog post. Each item mentioned is given a general range of prices for which it will most likely sell. Similarly discussed in class, these listed values are the seller’s values or prices. These values were strategically sought up and will most likely have an effect on the auction attendees’, or the buyers’, true values. For example, if I was interested in buying the Jackie Robinson baseball that is estimated to sell for $30,000-$40,000, I would go into the auction with my true value somewhere in between that range. However, if a range of prices was not listed for this item, than I most likely would have a different true value (and most likely lower), since I wouldn’t know the seller’s price. Therefore, it was very strategic of the article writer/auction house to present potential prices of these items to increase the buyers’ true values and thus increase the overall price of the item.
The overall take from this article, is that for an auction similar to this one, it is actually beneficial to present potential prices for items. Presenting these values to buyers will most likely increase the base value the buyer enters the auction with. If everyone who is bidding on the item has a higher initial value, than the item will sell for more than what it could actually be worth, overall benefitting the seller who will get some sort of payoff.
http://www.forbes.com/sites/kurtbadenhausen/2016/10/12/5-million-of-memorabilia-from-baseballs-golden-age-on-the-auction-block-at-christies/#35d6ad2a14a4