{"id":42461,"date":"2011-11-28T12:20:24","date_gmt":"2011-11-28T17:20:24","guid":{"rendered":"http:\/\/thesocietypages.org\/socimages\/?p=42461"},"modified":"2012-01-08T14:32:13","modified_gmt":"2012-01-08T19:32:13","slug":"auctions-and-the-social-construction-of-value","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/socimages\/2011\/11\/28\/auctions-and-the-social-construction-of-value\/","title":{"rendered":"Auctions and the Social Construction of Value"},"content":{"rendered":"

Cross-posted at Montclair SocioBlog<\/a>.<\/em><\/p>\n

I don\u2019t know the sociological research on auctions — surely it must exist — but auctions seem like a wonderful illustration of how value is socially constructed. I didn\u2019t really need to be convinced that people don\u2019t always live up to economists\u2019 ideals of rationality, but I was reminded of it on Saturday when I watched the auction of items from my mother\u2019s \u201cestate\u201d (i.e., stuff in her apartment). I wasn\u2019t in the actual auctiion room; nowadays you can watch — and bid — online.<\/p>\n

As someone who is relatively ignorant about art, I of course was puzzled as to why one piece was worth several hundred dollars while another might fetch only a $50 or no bids at all. But I thought that potential buyers would have an idea of how much something is worth — the objects and information about them are all available beforehand — and they would bid and stop bidding according to these prior valuations. But look at this lithograph, which graced my parents\u2019 wall for as long as I can remember.<\/p>\n

\"\"<\/a><\/div>\n

The opening asking price was $20.* None of the people at the auction house or online would offer that much. For the potential bidders, the picture was not worth $20.<\/p>\n

The auctioneer then lowered the opening bid to $10. Someone offered the ten bucks. A bargain. But then someone else bid $20. The picture which had not been worth $20 suddenly was. And then it was worth $30. You can see the bidding history to the right of the lithograph. The bidders were reluctant — twice someone came in just as the gavel was about to come down — but in the end, the picture that nobody thought was worth $20 eventually sold for twice that much. In the interval of a few minutes, this minimal interaction between bidders had quadrupled the value of the picture.<\/p>\n

There\u2019s also a cognitive-dissonance explanation. If I bid $10 for the item, I\u2019m not just telling myself, \u201cI think this picture is worth $10.\u201d Instead, the message is more general: \u201cI want this picture.\u201d Once we decide to buy something, our subjective valuation of it goes up \u2013 we\u2019re more comfortable thinking that we got a good deal than thinking that we wasted our money. Most transactions end there; we buy something at a price, and we are happy with it. But an auction encourages us to turn that subjective valuation into hiigher and higher cash bids.<\/p>\n

——————————<\/p>\n

* It can be a bit daunting, depressing even, to think that a picture so familiar that it feels like a part of your life turns out to be worth so little to other people.<\/p>\n","protected":false},"excerpt":{"rendered":"

Cross-posted at Montclair SocioBlog. I don\u2019t know the sociological research on auctions — surely it must exist — but auctions seem like a wonderful illustration of how value is socially constructed. I didn\u2019t really need to be convinced that people don\u2019t always live up to economists\u2019 ideals of rationality, but I was reminded of it […]<\/p>\n","protected":false},"author":258,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[8070,36,293],"class_list":["post-42461","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-artliterature","tag-economics","tag-social-construction"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/42461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/258"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=42461"}],"version-history":[{"count":5,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/42461\/revisions"}],"predecessor-version":[{"id":43556,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/42461\/revisions\/43556"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=42461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=42461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=42461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}