While proxy bids are sometimes necessary, I was wondering about all of your thoughts on the subject. Particularly, the use of a high proxy and its effect on pricing.
As I see it, the subject breaks in one of three ways. For people who like to buy on a strict budget, it is one and done. You win or you lose. But for others, I know when I am outbid by a machine, I have the urge to add a few dollars and see if that puts me on top. Bad for the proxy bidder, who must then pay more, and good for the seller. But, if it happens more than a few times, I have the urge to drop the whole subject and turn my attention elsewhere. That’s bad for the seller, since I am unlikely to come back, but not terrible for the proxy bidder, whose use of a high proxy does cost him more, but has eliminated competition. Timing also matters, where I think a high proxy in the early stages of bidding is more likely to increase overall pricing.
So, more simply, do you think high proxies result in higher final prices or lower prices, or have no effect?