Auction houses such as Sotheby's serve a valuable function in society, offering a location where people may trade valuable items of all types, without being required to set the price beforehand. This reflects the nature of the value of a commodity, which economists have long argued over.
The auction system implies that the value, and thus the price that will be paid, for an item is determined not only by the intrinsic characteristics of the object, but also by the way it satisfies those who desire to possess it. While supply factors do come into play, such as the number and availability of such items, the cost of production becomes unrelated to the price that buyers are willing to pay under conditions where the item is scarce, unique, or has value based more on historical, emotional, or other human-related characteristics, such as items that belonged to famous historical persons. Thus, the auction allows buyers and sellers of objects, particularly those that are unique or have worth due to characteristics other than cost of production, to determine the price of such objects based on their subjective value.
As an auction house of international repute, Sotheby's holds the responsibility of supporting the auctioning of numerous unique items, often previously owned by royalty or people of great historical significance, or artworks created by artists of the highest caliber. Such items are naturally valued at extremely high prices, and both sellers and buyers place great trust in Sotheby's to manage the sales with integrity. Unfortunately, Alfred Taubman, who had previously rescued the organization from financial difficulties, involved both Sotheby's and Christie's auction houses in illegal price-fixing. Such behavior, succumbing to the temptation of easy profit, reflects the inability of fallen human beings to put the whole purpose above their self-centered desire for personal gain. It can only be hoped that a better system of checks and balances has been brought into play to better protect the public in the future, and that the time will soon come that honesty and integrity prevail ensuring that great institutions like Sotheby's can operate successfully bringing joy and satisfaction to all their clients.