Generally, auctioneers conclude that whatever they are selling is worth the most of whatever someone is willing to pay for that item, at the time. At auction, the high bid on a house near a lake comes to $215,000 and no bids for $216,000 come in, and the house is deemed “sold” and “worth” $215,000.
I think that is a very fair method of value determination. In fact, it lies in the very basic definition of extrinsic value (versus intrinsic value). Extrinsic value is “by agreement” and nearly everything (or maybe, everything) has only extrinsic value.
That house we mentioned before selling for $215,000 sells three years later at auction for $185,000 and I think it’s reasonable to say, that three years later, it is worth, extrinsically, $185,000 — in other words, by agreement of bidders (and a buyer) and seller concluded as such, even though the seller would think intrinsically that the house would be worth more.
Is anything intrinsically valuable? Philosophers for centuries have proposed that pain, or pleasure, for example, have intrinsic value (or lack of value). Yet, other philosophers assert that nothing has intrinsic value — that all value is “agreed,” and nothing has a value “in itself.”
In conclusion, when a seller claims that a certain item has intrinsic value — “just because it does,” auctioneers are reminded that the answer is “probably not,” and rather, that item has value only because others may (or may not) agree.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.face book.com/mbauctioneer. He is Executive Director of The Ohio Auction School.