Auctions and The Economy

The article, “Auctions Survive High Tech, Low Economy” explores the world of auction houses, and how they are thriving in a high tech, slow economy world. I originally expected to read about the intricacies of auction houses, and how they survive todays down economy, but quickly realized that the economy and auctions form a network all their own. Auction houses are thriving BECAUSE of the down economy and how they network with it. When people are financially strapped, they want to get cash quick, even if its less than they should get for whatever item they are selling. This is even truer of banks, that try to recoup as much money as possible for creditors as they can via foreclosures and sheriff sale type auctions. The network works like this, a person is financially strapped and can’t afford payments on their house, car etc. and the bank repossesses the home (sometimes with many of the persons belongings) or the car to re-sell it to try to recoup some of the cash that it has lost. The best way to sell these items (usually for large discounts) are auctions, and more specifically auction houses. So the bank repossesses a home with a lot of expensive items that were in the home, and they bring them to auction via an auction house. So the auction house auctions the items, gains as much money back as they can for the bank, and the bank repays what they can to the creditors. 

These auctions have gotten bigger, and more frequent over the years because of the financial crisis that has been affecting our country since 2007. This offers supporting evidence to a credo used in the auctioning business, “That when times are good, auctioneering is good, and when times are bad, auctioneering is great.” That credo is evidence that the economy and auctions form a network of their own. It was just interesting for me to see a subject like “auctions” that we learn about in class, and applying it to the bigger overall message of the power of networks.

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1 thought on “Auctions and The Economy”

  1. Markets are wonderful things that will always find a way to make money, but it is interesting to see that the auction market benefits from a slow down in the economy. It is almost as if the sellers have lowered his or her value of the item they are auctioning not because they truly value the item less, but they value the ability to make money faster more. Very interesting insight in how valuations change in certain conditions.

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