People who ask me about knives up for bid on eBay sometimes ask, 'What is it worth?' or 'What should it sell for?'
These questions have no meaning.
Value estimates are for insurance companies, yard sales, and tax assessors.
If you are bidding at an auction, there are two possibilities.
1. You are buying for resale. In that case you need to know YOUR market, YOUR customers.
2. You are buying for yourself. In that case you have to (horror of horrors) know yourself.
If you are bidding for yourself at an auction, the ONLY
number that matters is your own 'point of indifference.'
This means the tipping point between
where you would rather have the item
and you would rather have the money.
This is hard because it means being honest with yourself, which no one likes to do.
Your point of indifference has NOTHING to do with anyone else.
Nothing to do with the opening bid, the reserve price, or anyone else's bid.
Nothing to do with past sales, book prices, or inherent value (which is $1 regardless).
Only you can assign it.
You will know you are there when you lose an auction,
and your regret at losing is exactly balanced out by your
happiness at not spending the money.
If you ever say "I should have bid more," then you are not using your point of indifference.
Point of Indifference was one of the very few useful things I learned studying economics.
BRL...