At the auction

This afternoon the Rensselaer Central School Corporation opened bids for their surplus property auction. I was one of two members of the public who attended--I thought it might be interesting and entertaining. It was.

I was surprised at how many bids there were and how high some of them were. There were about a dozen lots of small tools and they received three to seven bids each. There were several bids on the two school buses. I think the high bids were $3715 and $2752. However, one person put in a bid of "$50 over the high bid." I hope they do not honor that bid. It violates the rules of this type of auction. The highest bid I heard for the score board was $927.77 and if that is the high bid, I expect we will see it in the future as a decoration at a local business. There were at least a dozen items that received bids in excess of $100.  The most distant participant was a bidder from Ohio,.

I put in a number of bids that were meant to win if no one else bid. I think I won only one lot and that was with a bid of $1.00. I outbid another person who bid one penny. I thought a dollar bid was a way of saying that I want you to give me the item if no one else wants it, but a penny bid says that much more clearly.

I am sure there were a number of items that received no bid. I do not recall any bids on the Tech lots of ethernet switches nor on the many student chairs and desks. However, a lot of items that I thought might not sell did sell and most of them at prices well above $1.00 or $1.01. I think the school corporation will be happy with the amount that they made from the auction.

From an economic point of view, the beauty of auctions is that they place items with the people that value them most. There are a number of ways that auctions can be conducted. The most common is the public auction in which the high bidder gets the item and pays the high bid. There are Dutch auctions in which the price starts unrealistically high and drops until some accepts the price. The school auction was a sealed bid auction in which people do not know what others are bidding. It has been a while since I looked at the literature on the economics of auctions but I vaguely recall that no one of these methods will on average yield more money. However, the literature on auction does have one kind of auction that people should avoid--auctions in which you pay your bid whether or not you win. A variant of that kind of auction is popular on the Internet, the auctions in which you pay to bid whether you win or not. I keep seeing ads for one of them that touts itself as "the fair and honest bidding site." Stay away.