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When thinking about various economic phenomena I have often found it useful to separate out the value of an item purely for its own sake from the value when you also consider the fact that you may resell it at some future point. I just wondered if this was something that economists regularly consider and if so what are these two prices referred to as.

Edit: As an example in response to comment: Imagine you saw a nice oil painting and you thought to yourself "that's beautiful. I'll buy that for my sitting room and if I ever got bored of it in years to come then I'll just sell it..." You may offer the painter price A. But now imagine the seller says "if you buy this painting you are not allowed to sell it." (also imagine the painter had some mechanism to enforce this rule - this is just a thought experiment after all). Now the price you would be willing to pay might be B - presumably somewhat lower than A.

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  • $\begingroup$ Price and a resale price and value and a resale value? I am not sure if I understand the question answer seems trivial $\endgroup$ – 1muflon1 Jun 5 at 22:33
  • $\begingroup$ This seems to be the difference between intrinsic value and market value? $\endgroup$ – Giskard Jun 6 at 6:45
  • $\begingroup$ The phrase "intrinsic value" does indeed sound right - though looking at a collection of slightly different online definitions, I've not seen it described in a way which is clearly the same as my "price B". $\endgroup$ – Mick Jun 6 at 9:14
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Wikipedia - Artificial Scarcity

https://en.wikipedia.org/wiki/Artificial_scarcity

Artificial scarcity is scarcity of items despite the available technology for production or the sufficient capacity for sharing. The most common causes are monopoly pricing structures, such as those enabled by laws that restrict competition or by high fixed costs in a particular marketplace. The inefficiency associated with artificial scarcity is formally known as a deadweight loss.

Appraisal Value (Valuation Methods for Illiquid Items of Value)

This 6 page reference, Guide Note 11 Comparable Selection in a Declining Market, applies the three terms "market value", "disposition value", and "liquidation value":

https://www.appraisalinstitute.org/assets/1/7/guide-note-11.pdf

Market value addresses the question, What would the property likely sell for on the date of value after a typical exposure period on the open market? Disposition value answers the question, What will the property likely sell for after a limited exposure on the market given the seller is compelled to sell? Liquidation value answers the question, What will the property likely sell for after a severely limited exposure on the market given the seller is extremely compelled to sell?

Economics literature may use different terms but should apply the same concepts or rules that make sense in law and commerce when attempting to determine the valuation of items in a potential future transaction.

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  • $\begingroup$ Interesting - but actually it's kind of the opposite of what I was asking. These is forced-to-sell prices but I'm after forced-to-not-sell prices. $\endgroup$ – Mick Jun 7 at 7:28
  • $\begingroup$ A "sale" means actual market transaction at a specified price. Financial data are now widely available with a lower licensing price for personal use as an individual investor; with no rights to sell (redistribute) the data; and with a much higher licensing price for rights to sell and thereby redistribute the data. This is legal or artificial scarcity since the data can be copied and distributed almost at no cost using electronic reproduction and communication networks. In any event with artificial scarcity I think concept of market price and choice of valuation methods dominates analysis. $\endgroup$ – SystemTheory Jun 7 at 10:55

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