Tuesday, October 22, 2013

An Auction Reserve Clause with Consequences

"Glass on the Tracks" is local event in a suburb of Dallas-Fort Worth in which glass artwork is auctioned off. The highlight is the "Glass Guillotine" where, if the bidding does not go high enough, the piece gets destroyed. The hope is that this will motivate bidders.


HT: Olga

1 comment:

  1. Auction houses and sellers in online auction portals such as eBay and Heritage Auctions rely on a number of factors to determine whether item can sell or reach a particular price level. Pricing policies such as reserves, presale estimates, and opening bid amounts protect the seller from under price performance if bidding levels or interest is low. However, in the case of reserves, some bidders may become reluctant to participate in this game strategy especially if the reserve price is unknown to the bidder. One example where reserves benefit the seller is that if the price does not reach the reserve amount seller has a choice to either award the highest bidder or redraw the item for a future auction. An auctioneer and/or seller may decide to use a reserve when best price estimates cannot be determined from similar item at auctions including lack of historical pricing information on items that rarely come to auction