agnitio :
hmm, I guess resale value would come from people who really want to purchase but would be ashamed to publicly bid.
I would say resale value would be quite high!

Agreed, but then don’t we have a case of a two goods as complements? i.e., now the buyer is purchasing both secrecy and the girl?

That doesn’t make the outcome suboptimal “ex-ante” so there is so no market failure. Furthermore, the potential for the buyer to be upset “ex-post” implies that there must be some, larger, potential for him to be happy – or else he would have done it in the first place …

“I would say resale value would be quite high!”

I’m not sure it would reach into the millions though – would it?

I would say resale value would be quite high!

While in theory an auction should deliver an optimal/”non-lemon” result, i suspect the inherent asymmetry of information between buyer and seller in this case will pose greater influence upon the buyer’s utility than say if the product was last month’s issue of The Economist.

I don’t know. Maybe we have a mix of an asset price bubble and a status good.

Say, the price climbed past people valuations at first because they believed “someone” would pay more – this only happens because information surround valuations is heterogeneous and asymmetric.

Given this, the price may have climbed to such a level that “buyer her flower” became a status good – and so the price then drove itself up in the final range.

She wouldn’t want to sell herself short after all just because we are currently in a low demand state, remember what larry flint said when he was trying to get Hustler bailed out….

I wonder if she set a reserve price to account for this:D

Well the return from selling her virginity could depend on an underlying social variable eg demand for deflowering. If that variable is stochastic then don’t you have some scope for real options analysis 😛

I’m pretty sure that there is no market failure here – as ultimately the buyer is willing to pay six odd million and the seller is willing to sell. However, ex post I can imagine someone coming out less than pleased …