[urq] Automobile magazine - other misinfo

[Mike Del Tergo]

Brett,
I don't know any eco professors who would say that, a bit of difference 
between the real world and books.   I bet they would say that the laws of 
supply and demand were met.  Not to mention that 10 people could bid the 
same market clearing price on EBay and only the earliest bidder wins.  I'd 
argue that an auction, or any actual transaction establishes market price 
(fair or not) at that time in that market. Fair, as in FMV relates more to 
sale conditions than final price.
Basically if you won the auction, you paid more than anyone else who knew 
about the auction and had real interest. Maybe you knew more about the item 
causing you to bid more.  When I bought my 200 20V avant, on EBay, I thought 
I could fix the listed problems cheap.  When the maint list was not what was 
listed I renegotiated the price to below what I KNOW a wholesaler bid and 
still got the car.  Subsequent to the purchase I was offered 20% more a week 
later, FMV was nowhere to be seen!  Does every wholesaler who buys a car at 
auction and resells it in another market for a profit not pay Fair Market, 
you bet, they paid auction prices, which many people (maybe even eco 
professors) will tell you should be less than retail and in many cases less 
than FMV.
Mike

From: Brett Dikeman <brett at cloud9.net>
Subject: Re: [urq] Automobile magazine - other misinfo

I posted about this in March when someone said something about A6 4.2
values, and ebay was mentioned.  Any economics professor will tell
you that auctions don't represent market value.  Google for "winner's
curse", or read: http://slate.msn.com/id/21810/

Basically, if you won the auction, you paid more than anyone else was
willing to pay- and hence you didn't pay fair market value for the
item in question.

Brett