To Bid or Not to Bid?

[Scrooge]

We can all agree that the presence of a reserve has an impact on the price an auction realizes but does it also have an impact on the entry decision a bidder has to make: 'To Bid or Not to Bid' ? To poll our behavior, I will ask you the following:

[sterlingcomics]

actually, I try to learn where each seller prices. Once I know if his reserves are reasonable or not, THAT becomes a key indicator to me as far as bidding--not the actual reserve itself.

[Scrooge]

However, how can you exactly determine what that particular seller's past reserves were?

 

I understand that you can figure out from past auctions whether some of his/her items sold when a reserve was in place but this will only provide you with an upper bound for the true reserve. You cannot pin down what the reserve was. Now for your purpose obtaining an upper limit might be all you need but you still do not have an exact measure of the 'reasonableness' of the seller's reserves.

 

The reasoning behind not bidding when a reserve is in place is probably three-fold / four-fold:

 

1) putting a reserve may indicate that the seller is weary of the ability of the market to correctly price his ware. This leads us to think that the seller's ability to communicate the quality of the comic is low and our perception will certainly be that the quality is under suspiscion and we would adjust our bid down or simply pass up on bidding

 

2) the auction's purpose is simply to test the market's demand for the book and why should I waste my time to bid when the reserve can be ridiculously high above fair market value

 

3) our odds of winning the auction is lower since in essence the presence of the reserve adds an artificial extra bidder that we have to beat. Consequently, why would I waste my time formulating a bid: checking the auctioner's past auctions, feedback, emailing, finding our maximum bid based on price guide, GPA, past auction prices, dealers' prices online or whatever formula we generally use. The search costs are too high and I pass up bidding in such a case.

 

4) maybe beating the reserve means we paid too much.

 

I am open to discussion / rebuttal / additional insights on this topic. I will also try to explain better / expand on what I meant above if you'd like.

 

Now, I know that a common opinion on these boards is that sellers place reserves because if the market does not clear that value, they'd rather keep the book in their collection or they do not wish to sell to 'protect their investment'. In the above discussion, it is implicit that I consider all comic book market participants having the ultimate intent of selling their book (be it themselves or through their estate's liquidation (unless you plan on taking some to the grave with you literally )).

[143ksk]

I bid what a book is worth to me. Makes no difference to me if there is a reserve or not. If the reserve is above my bid, that's fine. Often sellers will offer the book to the high bidder at their bid price. Which often means I get it for less than I was willing to pay.

[blowout]

A reserve doesn't really affect me all that much, unless the bidding is already pretty high but the reserve is still not met.

[Aces]

No big difference here.