Auctions: How the other half bids

Secondhand goods are usually sold at a steep discount, but a select few items get more valuable over time—or because they were discarded by a famous person. Each year, billions of dollars in art, antiques, cars, livestock, jewels, alcoholic beverages, and celebrity ephemera appear on auction blocks around the world. The practice of public sale to the highest bidder dates back thousands of years—and involves some serious ethical issues. But the modern auction, which is [driven by narrative, as much as actual objects]( emerged in Georgian England, when the estates of the rich and famous were divided up and sold to the slightly-less rich and famous. “Auctions were concerned with revealing and reinventing the lives of prominent social figures,” [Madeleine Pelling writes in History Today](. “They often took place following the death or bankruptcy of a person, usually someone from the wealthier ranks of society who had owned goods worth selling.” It operates much the same way today, though bidders have recently begun to swap out the flick of a paddle in favor of the “ping!” of an internet offer. Are you sold? 🐦 [Tweet this!]( 🌐 [View this email on the web]( [Quartz Daily Obsession] Auctions April 01, 2020 Thrifting for the rich --------------------------------------------------------------- Secondhand goods are usually sold at a steep discount, but a select few items get more valuable over time—or because they were discarded by a famous person. Each year, billions of dollars in art, antiques, cars, livestock, jewels, alcoholic beverages, and celebrity ephemera appear on auction blocks around the world. The practice of public sale to the highest bidder dates back thousands of years—and involves some serious ethical issues. But the modern auction, which is [driven by narrative, as much as actual objects]( emerged in Georgian England, when the estates of the rich and famous were divided up and sold to the slightly-less rich and famous. “Auctions were concerned with revealing and reinventing the lives of prominent social figures,” [Madeleine Pelling writes in History Today](. “They often took place following the death or bankruptcy of a person, usually someone from the wealthier ranks of society who had owned goods worth selling.” It operates much the same way today, though bidders have recently begun to swap out the flick of a paddle in favor of the “ping!” of an internet offer. Are you sold? 🐦 [Tweet this!]( 🌐 [View this email on the web]( By the digits [$29.1 billion:]( Total value of art auction sales in 2018 [40%:]( Share of the art market controlled by the top top houses, Christie’s and Sotheby’s [50:]( Approximate number of auctioneering schools in the United States [$48.4 million:]( Final bid for a 1962 Ferrari 250 GTO, the most valuable car auctioned to date [25%:]( Share of Sotheby’s auction items sold to online bidders in 2018 [2,500:]( Lots in legendary hoarder Andy Warhol’s 1988 estate sale [$4.1 million:]( Price of the top-selling Nobel Prize, awarded to James Watson in 1962 for discovering DNA Giphy Explain it like I’m 5! How does an auction work? --------------------------------------------------------------- 🇬🇧 English auction: If you’re thinking “people submit increasing bids until someone wins, duh,” that’s the one. 🇳🇱 Dutch auction: The auctioneer sets a too-high price, then throws out lower prices until the first bid, which wins. It’s fast, since there’s only one bid. It is known as a Dutch auction because the form was [used to move tulips]( during the disastrous Dutch tulip bubble. 🙈 Blind auction: Participants submit sealed bids. Such auctions are handy if it’s difficult to get the participants together (less of a problem in the internet era), if a government wants to give small-firm bidders a price advantage, or to [avoid collusion]( (pdf). 💰 Vickrey auction: A blind auction, but highest bidder pays the second-highest bid. It’s supposed to encourage “truthful” bids, because “a winning bidder can [never affect the price it pays]( (pdf), so there is no incentive for any bidder to misrepresent his value.” It’s a theoretically elegant auction that isn’t used much because it can be [easily gamed]( by collusion or with “shill bidders,” and because the most theoretically efficient price is often [not the highest one obtainable](. Quotable “I hate art auctions. Not just because they’re freak-show legal casinos, spectacles where the Über-ultrarich can act out as profligately in public as possible, trying to buy immortality, become a part of art history, make headlines, and create profit. I don’t only hate them because they may be the whitest sector in the entire world. I hate them for what they do to art, for the bad magic of making mysterious powerful things turn into numbers.” —[New York Magazine’s art critic Jerry Saltz]( Giphy Membership The friendly-ish skies --------------------------------------------------------------- For the second time in less than two decades, US airlines have come, hat in hand, to the government. In our guide to the consequences of the coronavirus pandemic we ask: Is now the time for the [airline industry to be re-regulated?]( Giphy Dept. of Jargon Auctioneer talk --------------------------------------------------------------- American auctioneers have their own language—a strange, panic-inducing staccato. “The auctioneer’s cadence must be learned and practiced. Start by chanting pairs of numbers in ascending order (1, 1, 2, 2, 3, 3), then do them backward. When you can work in conversational banter without breaking your rhythm or losing track of the count, you’ve got it down,” [according to Slate](. In elite auction houses like Christie’s and Sotheby’s, things are more phlegmatic. Auctioneers model a British style, where instead of naming the next price, they ask the audience for “advances on the current bid.” But whether you’re at a county fair livestock sale or a New York art show, there are a few terms worth remembering: Lot: Each unit for sale at the auction, whether it’s a single item or a group of related objects. Catalogue: An inventory of all the lots for sale; these books are expensive in their own right. Reserve price: The minimum price a seller will accept, never shared publicly. Starting price: The first price the auctioneer offers, set by the seller in advance. Hammer price: The winning price, which the auctioneer acknowledges with a literal bang. Bought-in: If an object doesn’t sell and stays with the seller. AP Photo/John Lindsay pop quiz How much did actress Zsa Zsa Gabor’s pill bottles sell for at her 2018 estate auction? $12,670$1,187.50$701.25$5,750 Correct. Yes, dahling. And her passport went for $4,250. Incorrect. No, dahling. I’m afraid not. If your inbox doesn’t support this quiz, find the solution at bottom of email. Have a friend who would enjoy our Obsession with Auctions? [ [Forward link to a friend](mailto:?subject=Thought you'd enjoy.&body=Read this Quartz Daily Obsession email – to the email – Brief history [400 BC:]( Herodotus documents the Babylonian Marriage Market in Histories. [193 AD:]( The Praetorian Guard kills the Roman emperor and sells the office to the highest bidder, Marcus Didius Severus Julianus, whose reign lasts nine weeks. [1674]( Stockholms Auktionsverk, the first modern auction house, opens in Stockholm. [1744:]( Sotheby’s, today the world’s largest broker of luxury goods, opens in London. [1766:]( Christie’s, Sotheby’s primary competitor, opens in London. [1786:]( Following her death, the Duchess of Portland’s Portland Museum, one of the largest private natural history collections in the world, is auctioned off piece by piece. [1819:]( To pay off household debts, the late Queen Charlotte’s family auctions off her “oriental curiosities and porcelain,” books, and more at Christie’s. [1966:]( Thomas Pynchon publishes his breakthrough postmodern novel The Crying of Lot 49. [1985:]( Malcolm Forbes pays £105,000 ($157,000) for a 1787 bottle of Chateau Lafite possibly owned by Thomas Jefferson. [1995:]( Pierre Omidyar, eBay’s founder, creates the site’s first auction: a laser printer he lists for $1, and sells for $14.83. Origin story The human cost --------------------------------------------------------------- For most of history, auctions were not about oil paintings and pearls, but human bodies. One of the earliest records of an auction comes from the ancient Greek historian Herodotus, who [wrote about the Babylonian Marriage Market]( where virgins were rounded up and sold to men. “The crier used to make them stand up, and sell them one after another, beginning with the most beautiful; and when she was sold for a great sum of money, he would put up the one who was next in beauty.” These strategies were later applied to enslaved people. In the US, companies with names like [“Auction & Negro Sales”]( bought and sold humans as part of the Transatlantic slave trade that forcibly displaced an estimated 30 million Africans over four centuries. In 1859, the [largest slave auction in US history]( occurred in Savannah, Georgia, when plantation owner Pierce M. Butler sold 436 men, women, and children over two days to pay off his debts. The practice is illegal in most countries today, but the black market sale of humans persists in shockingly public ways. In 2017, CNN published a report on [slave auctions across Libya]( where migrants and refugees are sold to smugglers for a few hundred dollars. AP Photo Fun fact! In 1998, Benjamin and Amanda Yim of San Francisco [bought a piece]( of the Duke and Duchess of Windsor’s 1937 wedding cake at Sotheby’s for $29,900. “It represents the epitome of a great romance—truly romantic and elegant like Fred Astaire and Ginger Rogers,” the buyer said. Million-dollar question Are auctions a rip-off? --------------------------------------------------------------- Research suggests there’s a “bidder’s curse”—a tendency for people to pay more at auction than they would otherwise. In 2007, a [study in the American Economic Review]( showed that 48% of auctions go over the fixed price. While only 17% of people engaged in overbidding, this small group changed the game for everyone. Why? “Auctions push a number of our psychological buttons,” [according to the BBC](. They play on scarcity, since auctioned items are unique and the bidding may be the only chance to acquire them. They create “social proof”—since everyone else is bidding higher, we should, too. And they’re competitive. One way to stop an auction from getting the best of you? Set a predetermined limit to your spending, just like on eBay. REUTERS/Carlos Barria The way we 🎨 now Since it opened in 1994, China’s art auction sector has grown rapidly. In 2018, it was the second largest in the world, accounting for [$8.5 billion]( in sales. But what drives the market? Calligraphy, watercolor and pastel paintings, and, according to this 2013 [interactive feature]( from the New York Times, fraud and forgeries. “Experts warn that the market here is particularly vulnerable because, like many industries in China, it has expanded too fast for regulators to keep pace,” the Times found. Take me down this 🐰 hole! You bought what? --------------------------------------------------------------- Auction sites like eBay have become a clearinghouse for some of our stranger interests. [Time magazine rounded up the 20 weirdest things ever auctioned off on eBay]( for the tech giant’s 20th anniversary in 2015. It’s a list filled with food items—some shaped like religious figures, others discarded by celebrities, as well as some charity-minded stunts, and one very famous kidney stone. REUTERS/Andrew Winning poll Have you ever bought something at an auction? [Click here to vote]( Never.Online, sure.Yes, in an auction house, with a paddle. 💬 let's talk! In yesterday’s poll about [bidets]( 44% of you said that you own one, 43% of you are thinking about getting one, and 13% of you are not interested. 🤔 [What did you think of today’s email?](mailto:obsession%2Bfeedback@qz.com?cc=&subject=Thoughts%20about%20auctions%20&body=) 💡 [What should we obsess over next?](mailto:obsession%2Bideas@qz.com?cc=&subject=Obsess%20over%20this%20next.&body=) [🎲]( [Show me a random Obsession]( Today’s email was written by [Eleanor Cummins]( edited by [Whet Moser]( and produced by [Tori Smith](. [facebook]( The correct answer to the quiz is $1,187.50. Enjoying the Quartz Daily Obsession? [Send this link]( to a friend! Want to advertise in the Quartz Daily Obsession? Send us an email at ads@qz.com. Not enjoying it? No worries. [Click here]( to unsubscribe. Quartz | 675 Avenue of the Americas, 4th Fl | New York, NY 10011 | United States