In my yard sale I might sell an ultra rare stamp for $1.

That's it's price.

Doesn't mean it's its value. It's not even anywhere close to being an indicator for it.

Might not even be due to ignorance, like in the example ("information assymetry" as the popular kids call it).

I might sell a Ferrari for $10 dollars out of spite (it belonged to my ex and I hated them). Stranger things have happened.

https://www.youtube.com/watch?v=-uYKLe2lP6Q

It's value to you was $1.

Well, that's a worthless definition of value.

There's no utility in saying something's value is $100 when nobody will give you $10 for it.

In the example plenty of people would give you $100 or even $10000 for the stamp. The person selling it and setting his price just didn't know it.

It's value to you was still $1.

You started the thread by asserting that "price is an indication of value" is correct.

I gave an counter example where someone ignorant of a thing's value (a guy who doesn't know they're selling an ultra rare stamp) sets it price to $1, wherea the market would gladly have paid 1000x times that.

You said, "It's value to you was $1".

When told it's not relevant, you said "there's no utility in saying something's value is $100 when nobody will give you $10 for it" which is about a different kind of value altogether.

While that's correct in itself, I pointed how that's not refuting my example, as my example covers exactly the reverse case: the situation where plenty would give you 10x or 1000x for what you sell at a price of $x. In other words, I gave an example where price is NOT an indication of value. That's what you had to refute.

You then backtracked to saying again: "It's value to you was $1".

In any case, value has specific meanings in economics, and neither of them is about "value to you [the seller]":

"Economic value is the measurement of the benefit derived from a good or service to an individual or a company. Economic value can also be the maximum price or amount of money that someone is willing to pay for a good or service. As a result, economic value can be higher than market value".

I.e. the value of something is different for different people.

That's basically the definition of value.

"Economic value is the measurement of the benefit derived from a good or service to an individual or a company. Economic value can also be the maximum price or amount of money that someone is willing to pay for a good or service. As a result, economic value can be higher than market value".

What price a seller sets for a product is based on neither of those cases.

It can be widely different from the actual market value the item could fetch (as per my example).

And it's also not the value the buyer gets ("the benefit derived from a good or service to an individual or a company"). Again in the example I gave this is many orders of magnitude bigger than the selling price.

I'd offer this example as counterpoint: I would not sell my dog for less than a 5-digits sum, but if my neighbor kills my dog all I'm owed is the ~$50 that it would cost to get a similar dog from the pound.

The dog's price is $50. The dog's value is much higher. See also: family heirlooms.

The value to you is much higher. The value to someone else is $50.

When two people agree on the value, an exchange takes place. That's how the Law of Supply & Demand works.

You reminded me of this: https://www.wired.com/2011/04/amazon-flies-24-million/

No sales took place. You can price something at whatever you want. If nobody is willing to pay that price, it does not have that value. If the price is less than you value it, you won't be willing to sell it.

Many people seem to believe in a notion of "intrinsic worth". There is no such thing. Trying to force such a thing using the law just results in a lot of deleterious distortions.

For example, when the government tries to fix the price of gold to a fiat currency, an inevitable monetary crisis follows.

If you interpret 'indication' broadly enough to allow plenty false positives and false negatives, then sure. But surely you would agree that a stronger formulation (high price must mean high value / low price must mean low value) would be false, yes?

> (high price must mean high value / low price must mean low value) would be false, yes?

The price the seller sets is the seller's idea of its value. The price the buyer bids is the buyers' idea of its value. When those prices are the same, and an exchange takes place, that price is the value of the item to both of them at that moment.

To me that seems complete nonsense. I have sold stuff for more than the minimum price I would have accepted, and bought stuff for less than the maximum I would have paid. This must happen all the time, and there must be many transactions where the price that ends up being paid doesn't match the value assigned by both the buyer and the seller.

Your story seems like a frictionless spherical cows in a vacuum kind of economics theory.

I once had my property assessed for quite a bit above market value. I offered to sell it to the county tax assessor for about 10% below what he assessed it at, saying that if its value was really what he assessed it at, he could make a fat profit flipping it.

He didn't take the offer.

That's what a "nonsense" value is - a price nobody is willing to part with their own money to pay for it.

Not if it's a pump and dump, or if they didn't include fees and rebates.

Fraud is misrepresenting the object for sale.

Btw, isn't the difference that price is before a transaction and value is after? You're perfectly capable of guessing wrong at how much value you're going to get out of something.