Do Wealthy Buyers WANT to Pay More at Auction?

Witness to Barrett-Jackson bidding, writer says "yes!"

In the minds of most, the purpose of an auction is to connect buyers and sellers in a real-time, dynamic exchange of micro-economic Machiavellian self-interest. The seller wants top dollar and the buyer wants a bargain, with those valuations made in a matrix of deeply personal and private considerations.

The American Heritage Dictionary defines an auction thus: "A public sale in which property or items of merchandise are sold to 'the highest bidder.'"

Not mentioned in that definition is the notion that the highest bidder is still looking for a deal. Surely no one participates in an auction with the intention of paying too much!

Not so, says Kenn Peters. After watching a great deal of the Speed Channel cable network's coverage of the Barrett-Jackson auto auctions at the end of December, Peters, the Auto Notebook columnist for the Syracuse Post-Standard, says he was struck by the premiums that were attached to many of the cars on the block.

"Why...are the '65 Mustangs and '68 Chevelles going for so much money at Barrett-Jackson? Why are the cars going for thousands and thousands more than most people would pay for a similar car purchased in Syracuse, or anywhere in New York state?"

Peters' conclusion is that the kind of folks who can participate in a Barrett-Jackson event WANT to pay more than they would elsewhere.

"They're well-heeled buyers, many flying in on private planes, all with letters of credit, ready to lay down their cash. How would it sound if some buyer snickered and said he got his new Chevelle on the cheap? Paying more than necessary is what separates them from the rank-and- file," he observed Sunday, perhaps observing for the first time what many of us refer to as "conspicuous consumption."

Peters' entire piece, "People prefer to pay more at auctions," is worth a read. He says he'll be tuning in on Tuesday, January 16th, during the "36th Annual Barrett-Jackson Collector Car Event" in Scottsdale, Arizona. We will too, mostly to fantasize about one day being able to consider over-paying for a 1932 Duesenberg.

(Pictured: 1932 Duesenberg Supercharged Dual-Cowl Phaeton not associated with one sold at Barrett Jackson event.)