In the Eye of the Beholder
"We live in a fantasy world, a world of illusion. The great task in life is to find reality."
- Iris Murdoch, author/ philosopher (1919-1999)
I love antiques and the thrill and competition of getting them at auctions. In my life, I have gone to hundreds of auctions and have found wonderful pieces, from beautiful 19th century china to decorative art pieces from the 20th century. Not only am I fascinated by the prospect of the pieces I may find, I am always in awe of the psychology and buying patterns at work among my fellow bidders.
I can’t tell you how many times I have taken my seat at an auction and watched an item go up on the block and bring in hundreds of dollars. Then, literally the very next day, I could attend another auction and quietly buy the same exact item for a mere $10. And I, wearing my best poker face, walk out of the auction house pleased with my new find, having purchased it at a fraction of the cost of yesterday’s buyer.
At these moments many would ask themselves, “What exactly is at work here?” One of the large factors at play is the perceived value of the item. In an article on the Web site www.thinkingmanagers.com, author Edward de Bono explains this phenomenon: “No matter how real a value may be, it has no value at all until the value is perceived.”
Often two products will perform the same function and be of equivalent value. One may be offered at a high price by one company while another may offer the same product at a substantially lower cost. More often than not, buyers will mistakenly perceive the less expensive product to be of less value and will purchase the more expensive alternative because they wrongly equate higher price with better quality. Of course, this is not always the case.