I mean, yeah, kind of. The market is an indicator of value, but it can be wrong for a number of reasons (false scarcity, price fixing, monopolistic pricing, speculative investments, etc). Earlier you asked me how I would determine value, and I told you “consensus”. The market is a form of consensus, but not the only form. If I’m unsure whether the market is correctly valuing something, I’d try to get an expert consensus. For example, that’s actually what I do when I’m trying to buy a rare video game, because that market is volatile as fuck, and isn’t a reliable indicator of value.
I see. And what makes someone an expert on the value of a video game? Exactly what metrics do they use to determine this value and how do all the other experts come to this consensus? Do you even know?
If I did know, I wouldn’t need to consult them. Though, I’d imagine they use a similar technique to how I would appraise the value of a gaming PC, not that I’m an expert on consumer hardware pricing, but I’m fairly knowledgeable. But I would use historical data, performance metrics (although this wouldn’t apply to retro games), market conditions, conditions of the parts, and a certain amount of speculation.
The reason I’d look for a consensus is to account for outliers. If one expert is using some metric that causes them to over or under value a game, I’m less likely to get ripped off by having multiple expert opinions forming a consensus than if I relied on just that one expert’s opinion.
So the market always decides value except when it doesn’t. I see.
I mean, yeah, kind of. The market is an indicator of value, but it can be wrong for a number of reasons (false scarcity, price fixing, monopolistic pricing, speculative investments, etc). Earlier you asked me how I would determine value, and I told you “consensus”. The market is a form of consensus, but not the only form. If I’m unsure whether the market is correctly valuing something, I’d try to get an expert consensus. For example, that’s actually what I do when I’m trying to buy a rare video game, because that market is volatile as fuck, and isn’t a reliable indicator of value.
I see. And what makes someone an expert on the value of a video game? Exactly what metrics do they use to determine this value and how do all the other experts come to this consensus? Do you even know?
If I did know, I wouldn’t need to consult them. Though, I’d imagine they use a similar technique to how I would appraise the value of a gaming PC, not that I’m an expert on consumer hardware pricing, but I’m fairly knowledgeable. But I would use historical data, performance metrics (although this wouldn’t apply to retro games), market conditions, conditions of the parts, and a certain amount of speculation.
The reason I’d look for a consensus is to account for outliers. If one expert is using some metric that causes them to over or under value a game, I’m less likely to get ripped off by having multiple expert opinions forming a consensus than if I relied on just that one expert’s opinion.
So you don’t actually know what sets the value of the games you buy, you just assume the value is set in some rational manner.
I’m not sure what is leading you to make such an assumption.