Does the third buyer really establish value and demand?

DHeath

If there are three buyers for a particular coin at say $10,000, $9500, and $7000, doesn't the third buyer really establish the coin's worth? Supposing buyer one acquires the coin for $9600, what would be the next price at which it would be sold at auction?

Fletcher

That's deep

roadrunner

In the case of a low pop coin, the first buyer just may bid on the 2nd one as well. That could add value to both his coins. Sometimes bidders don't show themselves until another more visible one leaves. Dealers as a rule are always available as bidders assuming they know the coin is available.

roadrunner

keets

your theory of escalating prices may hold true for private treaty sales, but for auction sales i'd think that anything goes. the most important factors for an auction sale would seem to be the house's reputation, pre-sale advertising/hype, venue such as the ANA Show, etc., while the private treaty sale price would seem more likely to be determined by sheer "i gotta have it" demand, deep pocketed-ness and/or knowledge of previous sale prices.

Nysoto

This is an interesting question.

If you examine the bidding interaction of auctions, it depends on whether the coin is in a thinly traded series, or a series that is popular and has a larger customer base. With a thin market, such as terminal die states on certain series, the bidding will go to the level of the generic price without a die state premium, and the price could jump 200% or more in the final bidding between two specialist collectors who want this die state. This can be seen in eBay bidding and floor auctions of large auction firms, so in a very thin market the third buyer may be irrelavant.

If you look at the bidding on a popular series at price and grade levels where there are many collectors, it is the bidding pressure from the many buyers to push the price level up to close to the final bid. The last two bidders are unlikey to push the price up 200% unless it is a grade rarity or monster toning. In popular series, it is the third bidder, and the masses below, that can detemine the price at auction.

In specialized markets and grade rarities, it could be only a few buyers to establish prices and values. With popular series at more common grade levels, it the third buyer, and the many more buyers below, that can establish the final price. So is the trickle down theory valid for coin value increases? Or is it the masses who push prices up to new levels? It may depend on the series.

It would be interesting to know the method used to determine greysheet price changes.

MAD4MORGANS

<< <i>If you examine the bidding interaction of auctions, it depends on whether the coin is in a thinly traded series, or a series that is popular and has a larger customer base. With a thin market, such as terminal die states on certain series, the bidding will go to the level of the generic price without a die state premium, and the price could jump 200% or more in the final bidding between two specialist collectors who want this die state. This can be seen in eBay bidding and floor auctions of large auction firms, so in a very thin market the third buyer may be irrelavant. >>





Although on venues like eBay where you can use a bid-sniping program, the jump is normally not as visible on how much a coin would be worth as the maximum that a specialist collector would pay is held to the next increment over the last bidder's highest bid.

ER

How much a coin is "worth" is determined by the next transaction.

BigE

It depends if it's in a different holder------------BigE

MAD4MORGANS

<< <i>How much a coin is "worth" is determined by the next transaction. >>



I wish I said that.