auction, auctioneer, auctioneers, auctions, Dan Slater, easier, friction, live and online, live auctions, Northwestern University, online auction, online auctions, Peter Ludlow, transaction costs, vested
Peter Ludlow is a professor of philosophy at Northwestern University. He writes on a broad range of topics, including conceptual issues in virtual worlds and the nature of computer-mediated communication.
Dan Slater has written about the online dating environment — suggesting that online dating leads us to value our relationships less and that is a problem.
Professor Ludlow agrees, but he agrees from a different perspective. He proposes online environments:
- “Lack sufficient friction, and paradoxically this is not a good thing.”
He points out that all markets have some friction (transaction costs,) and some more than others. In our analysis here, a live auction has typically much more friction than an online auction.
Professor Ludlow goes on to describe his analysis in terms of collecting stamps:
Let me illustrate this point with an example that has nothing to do with dating. It is a deep dark secret of mine that I used to be a philatelist — yes, you can denigrate that fine hobby by calling it stamp collecting if you wish. I collected certain kinds of 19th-century postal history (mailed envelopes) and I used to enjoy traveling from dealer to dealer digging through bins of musty postal history looking for the items that I collected. And then the Internet happened.
Collecting postal history has gone from a labor of seeking out interesting shops and sales and digging through musty boxes to one of logging on to eBay, typing in a search request (19th-century postal history), and clicking on whatever envelope covers catch my eye. The search process has for all practical purposes become frictionless, and the net result is that it just isn’t fun anymore. My collection has been placed in a storage locker. I’m done with it.
What is being talked about here could have just as easily be that easier is not always better. Collecting stamps (or anything) might actually be more work, more tiring, more expensive, more time consuming — and actually be preferred to quick, easy and inexpensive?
Yes, that’s what is being suggested.
A friend of mine almost never takes the interstate when traveling. I tell him, “But it’s much faster …” to which he replies, “It’s as much the journey as the destination for me.” Another friend goes to all home Ohio State football games which requires driving, parking, walking, tickets … when he could watch the entire game, close-up, for virtually no cost on his 72″ television?
I often find myself surrounded by auctioneers discussing how to make it easier — if not nearly effortless — for bidders to participate in their auctions. The question is, “Is it always prudent to make it easier?” Professor Ludlow stopped collecting after collecting became so easy; it wasn’t fun for him anymore. Is this a consideration for auctioneers?
This isn’t the first time we’ve suggested this concept. Consider that a bidder online is just one click away from not being a bidder. A live bidder has transaction costs (friction) which makes him more vested, more committed and more likely to participate.
And further, Professor Ludlow suggests being there live is not only fun but increases the odds of bidding on other property not necessarily in the original plan.
As an auctioneer … next time you’re investigating how to make it easier for your bidders to buy at your auction, it may be worth at least some time thinking about whether easier is necessarily better, especially if you are selling 19th-century stamps.
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. He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.