Sender: Rare book and manuscripts <EXLIBRIS-L@LISTSERV.INDIANA.EDU>
Nina's point about the buyers' premium is the key to the whole discussion.
Charging a sellers' commission as well as a buyers' commission has the house
working for two agents. The right hand against the left.
Gabriel Austin
-----Original Message-----
From: Rare book and manuscripts [mailto:EXLIBRIS-L@LISTSERV.INDIANA.EDU] On
Behalf Of Nina Musinsky
Sent: Saturday, August 18, 2007 1:48 PM
To: EXLIBRIS-L@LISTSERV.INDIANA.EDU
Subject: Re: [EXLIBRIS-L] NY Auction Bidding Legislation
Re Edward's points:
To be more specific, the reserve is easy enough to discern (approximately)
if the lot fails to sell or if it sells at or below the low estimate with no
evidence of a second bidder. My point was really that when the bidding goes
higher the reserve is irrelevant: in a "successful" (from the auction
house's point of view) sale who cares what the reserve is? The
bidder/buyer's focus is then on the other bidders against whom he/she is
competing. This "capitalism as theatrical event" aspect of auctions is the
essence of their appeal for sellers, and it won't be changed by this
legislation.
I don't see how the basic structure of the auction process is altered when
bidders jump in at the last minute.
You are right, Edward, that this legislation would affect the isolated case
of a single bidder who wishes to pay no more than the low estimate: if
"consignor's bid" is called out by the auctioneer, or if the bidding opens
at the reserve, some temporary mystification is taken away -- temporary
because, under US law at least, in which the auctioneer must announce (or
mutter) the fact that a lot fails to sell, that single bidder quickly finds
out whether or not he/she has been bidding against the reserve if the lot is
bought in. -- As Sotheby's lawyers pointed out, auctions are already
strictly regulated in NY. I don't think that this slight variation in
auction practice would fundamentally alter the economic power of the auction
houses, contrary to Sotheby's argument. Whether one considers the proposed
legislation negative or positive, in my opinion its effect would be
negligible.
Christie's new buyer's premium of 25% below $20,000 should ideally (but
probably won't) have a far greater deterrent effect on consignors in areas
of low-value material like the majority of books and prints-- which is just
what the managers of the big auction houses want: to get rid of the small
fry.
Nina Musinsky
-----Original Message-----
From: Rare book and manuscripts [mailto:EXLIBRIS-L@LISTSERV.INDIANA.EDU] On
Behalf Of Edward Levin
Sent: Friday, August 17, 2007 10:03 PM
To: EXLIBRIS-L@LISTSERV.INDIANA.EDU
Subject: Re: [EXLIBRIS-L] NY Auction Bidding Legislation
>Nina Musinsky wrote:
> ... After
> even a bit of auction experience bidders can easily figure out where the
> reserve lies.
Really? For the major auction houses, the reserve is typically at or not
much less than the low estimate (by an earlier NY consent decree it can't be
higher than the low estimate), but it can indeed be considerably lower than
that low estimate. As an experienced auction bidder myself, I would have no
way of knowing or guessing or figuring out those cases in which it is the
latter.
>The bottom line in the Anglo-American auction system is that
> one either buys the lot at the reserve or competes with other bidders. If
> no
> one wants to pay the reserve price, the lot is unsold. This is how
> auctions
> work now, and the auctioneer's calling out below-reserve bids as
> "consignor's bids" might enlighten a few newcomers but would not alter the
> auction process.
In any number of instances it will indeed alter the auction process as, in
my experience, the process is rarely as straightforward as you describe. If
you've participated in many auctions (which I assume you have) then you will
have witnessed any number of instances where bidders will join the bidding
in the middle of the process, or at the very last second. The model of
several bidders all starting off together from the beginning and gradually
dropping off one by one is hardly a universal description of the auction
process in actual practice.
Consider the case when only a single bidder is initially bidding on a given
lot (which does indeed happen). That bidder may indeed be willing to pay the
reserve price, but could only do so if the auctioneer either starts the
bidding at the reserve price, or calls out "consignor's bids" until the
reserve is reached, or waits for a lurking, last-minute bidder to recognize
that they will have to jump in sooner that they wished.
I don't think that the proposed legislation is entirely negative, but it
would indeed change the dynamics of the process to some extent.
Edward Levin