Supply, demand, and the question of scarcity

Author: Matt W.

One of the things that I have always found a little bit puzzling about collectors given how much money they spend on cards is how little they seem to understand the basic tenets of microeconomics, i.e. the laws of supply and demand. But then, maybe I shouldn’t be so surprised, given that large sections of the public seem to exhibit little understanding of economics as well.

The biggest mistake I see most collectors make is to assume that scarcity automatically confers value, as if demand does not even enter into the equation. Currently this is manifesting itself primarily in the fetish for 1/1 cards, which although scarce individually, are not overall. For example, there are currently over just under fifty-five hundred different 1/1 cards available for sale on Ebay (yes, that’s not a typo…I said almost 5,500), including 36 different Pujols 1/1’s, 37 different Jeter 1/1’s, 58 different Peyton Manning 1/1’s, 39 different Brett Favre 1/1’s, 77 different Kobe Bryant 1/1’s, 102 different LeBron James 1/1’s, and even 112 different Michael Jordan 1/1’s. So while each individual card may indeed be scarce, it is quite clear that in the aggregate they are not, especially considering that those currently up for sale on Ebay probably represent only a small fraction of those actually in existence.

The question I have for those collectors madly bidding up many of these cards to ridiculous prices is where they think demand for them is going to come from in the future? Those of us who have been collecting for many years have seen many hobby fads both come and go, and know that most cards peak in value immediately after their release and go steadily downhill from there. But what collectors seem to be ignoring is the fact that the overall supply of 1/1 cards, just like any other item that continues to be produced and does not wear out, is only going to increase in the future. This means that the only way that prices can hold steady is if demand continues to keep pace with supply, something that is relatively unlikely to happen. After all, given the impossibility of completing a 1/1 set from a given product, demand isn’t going to come from set collectors. And demand from player collectors is probably also going to weaken over time as they are presented with more and more choices of which 1/1 cards to buy. So the real question becomes one of who is going to want these cards a year or two down the road once new products have been released and demand for the current hot product has waned.

What’s also not surprising is that collectors of some of the other hot items of the day such as memorabilia and signature cards also seem to have failed to realize that the true supply of the items that they believe are scarce and are therefore paying through the nose for is also for the most part unlimited. Consider that virtually any player currently living, be they a scrub or a HOFer, has not only already signed thousands of items, but barring an untimely death, will sign thousands more items in the future. Most living all-time greats such as Willie Mays, Hank Aaron, Joe Namath, Johnny Unitas, Jim Brown, Kareem Abdul-Jabbar, Wilt Chamberlain, Jerry West, Larry Bird, Magic Johnson, Bill Russell, Gordie Howe, Bobby Orr, Wayne Gretzky, and Mario Lemieux have autographs that can easily be found for around $50. Even now deceased all-time greats such as Ted Williams, Mickey Mantle, and Joe DiMaggio signed so many items before their death that their autographs can be easily found for under $100. Kinda makes you wonder what the guys paying hundreds of dollars for “scarce” signature cards of the next hot rookie are thinking, doesn’t it? And last time I checked, there wasn’t too much of a natural limit on the supply of “xxx-worn” jerseys either, even ones with laundry tags, cool patches, and four-color swatches.

The bottom line is this. The supply of just about anything currently being produced is only going to increase over time, be it 1/1 cards, autographs, or other types of memorabilia cards. Demand for these items, on the other hand, is in most cases going to wane over time. So to all those collectors out these spending hundreds of dollars on supposedly “scarce” cards of the latest hot products and players, ask yourself this: In two or three years (or heck, even in six months), who is going to want the card you just paid hundreds of dollars for badly enough to pay you even more for it?

Just remember that supply is only half the equation…prices are a function of both SUPPLY and DEMAND, not just one or the other.



  1. I see where you’re going with this, and agree with the logic to a certain point. But I think you failed to consider a few things for yourself.

    Many of the people who are paying top-dollar for the “scarce” cards don’t give a rat’s behind about the future value. The value to them is, for lack of a better term, “priceless,” because it is for their own collection. People do not always buy cards thinking they will gain value. Hell, I’d guess that a good percentage of people who buy cards understand that anything but a rookie card will always decrease in value — with very few exceptions and circumstances. (i.e. immediate impact on autographs after a player’s death.)

    I’ll agree that in general that the pool of 1/1 cards has grown, and will continue to grow. But everything is a case-by-case basis. Not all 1/1s are created equal, and collectors know this. A Chrome Superfractor will fetch far more than a 1/1 from another product.

    In the case of printing plates, collectors have kind of soured on these in recent years. Plates are technically 1/1s, but many consider them to be 1/4 (at a minimum) because of the different colors used, also some sets include card backs (horrible idea by the way). Regardless, the desire for plates is less than most — if not all — low-numbered parallels. But even that can’t be considered as a general rule of thumb. If a guy is working on a complete run of plates for a particular player, he likely will be willing to pay through the nose for the one or two that he is missing.

  2. Great post. This really made me rethink my purchasing practice of 1/1s. Rather than pay a percntage of what the seller thinks the card is worth I should pick a price and not exceed it. A for a base card, B for an insert, C for a mem or auto; J for a base /n, K for an insert /n, L for a mem or auto /n; X for a basic 1/1,Y for an insert 1/1, Z for a mem or auto 1/1.

    In virtually all cases A<B<C<J<K<L<X<Y<Z. Of course this arguement holds only for collectors and does not apply in the same way to dealers or investors.

  3. Woo! Another economist in the mix. Although I think you over-simplify the issue. Just because there are tons of 1/1 available doesn’t make them less rare. Each card is still one-of-a-kind. The difference is how many close substitutes does each 1/1 card have? This elasticity issue is really the basis for things. A printing plate is a relatively mundane 1/1 because there are 4 very close substitutes in each release. Meanwhile, a rare cut auto 1/1 may keep its value because there are few things on the market that are similar. I tackled these economics issues in the 4th Blog Bat Around, if you’re interested.

    Also playing a role in 1/1 values is that supply and demand really is not at issue here. The reason is that Supply=1. There is no market rate. Rather, at least in theory, the collector who values the card the most will pay the most to get it. Just as you say, that will prevent the card from appreciating over time and may very well depreciate depending on external factors (e.g. future availability of close substitues, future popularity of the player). Much more interesting, to me at least, is the value of cards that aren’t 1/1s but are still relatively rare. In those cases, Supply and Demand can play a much bigger role. If you’re interested, I did a five part series on the economics of card value last year (although Parts IV and V really fell apart on me) that tackles a lot of this. I’d love to get your thoughts.

    Anyway, nice post–thanks for keeping Wax Heaven alive–and thank you for spreading those sweet sweet economic theories around.

  4. I’ve fallen in love with 1/1 too.. Over the past couple of months I been strictly buying Printing Plates off eBay… To me they look so much cooler than the card itself… Something about it being of metal… maybe it’s just a guy thing?

  5. I stand by my philosophy that 1/1 cards, while cool by design and concept, are for two types of people…

    Super Collector’s – Who must have every card of their player.


    “Prospectors” – The profiteering fringe of the collecting community who by definition are not collectors at all but meerly incarnations of stock floor traders without the colorful jackets.

    It’s unfortunate that too much of our hobby is predicated on the latter of the two.

  6. I think you made a mistake in your first line by using “collectors” instead of “investors”. A collector will likely buy a 1/1 just to have it, not as an investment. I’ve bought a few 1/1s / printing plates of guys I like or I’ve seen play in the minors. I know that if I sold them, I probably wouldn’t get what I paid for them. And that doesn’t bother me one bit. But as for general overall / future demand, you gotta remember that on eBay it only takes two bidders with open wallets to drive up price.

  7. Yes, but you forget those people who buy the cards, not to sell, but for their own personal collection. I’m sure many people buy 1/1s, autos, patches etc. for their own personal collection with no intention of selling it. For them merely having the card is reason enough to pay the money. Supply and demand in the future mean nothing to them.

    However, even if people buy the card with a view to selling it, the increase in supply and decrease in demand over time doesn’t necessarily mean they won’t get much for their card in the future. Why? Because in an auction format for example, all you need is 2 people who really want THAT specific card (and that is where supply comes into it – because there may be thousands of 1/1s, but only 1 of that 1/1) to bid up the price, again possibly to add to their collection. It doesn’t necessarily matter that 98% of the people who would now buy that card don’t want to buy it in the future, so long as you still have some that want to buy that specific card in the future and will pay big bucks for it. Heck, in the Ebay buy it now or best offer option you don’t even need 2 people, just one.

    So while your anaylsis does have truth to it, it is extremely simplistic, and appears to be a veiled attack on those collectors who spend big money on their cards.

  8. Well put. I had a Donovan 1/1 printing plate from Goodwin…sold it on eBay for like 5 bucks. WooHoo!

  9. I don’t think microeconomics really applies to collectibles. People bid ridiculous amounts on cards because they want to own them, not necessarily because they think the value will increase. Many collectors don’t look at overall population of 1/1 cards. And why should they? To them each is unique and different. As far as player collectors, there only needs to be 2 that must have the card to drive the price up on ebay.

    So do collectors spend money in seemingly stupid ways? Yes. But, is it a question of basic supply and demand? No. Those principles break down on an individual card level.

  10. I get so tired of reading about people attacking they way other people collect. If everyone would spend more time worrying about their own collections and not whatever anyone else does, we’d all be much happier! Who cares if someone “overpays” for a card? What if they wanted it no matter what? I buy cheap game used and autographs of COMC, WAY under what I’d spend to find them in a pack… does that make me the smartest collector alive?

    I understand the general premise of your argument against 1/1s, and it can be applied to serial numbers in general. Why is one Brian McCann auto numbered to, say, 50, any less ‘rare’ than one numbered to 199? Same sticker, different card. Personally, if all I was after was the autograph, I’d get the cheaper version, but I can completely understand why a player collector would think differently.

    What if I told you I spent $5 on a sweet spot autograph of Kelly Shoppach?? I definitely cant turn around and sell if for $10. So by that logic should I NOT have purchased it? What if I just like the looks of Sweet Spot autos, regardless of who’s on it? Because I also spent less than five bucks each on a Nate McLouth auto AND a Marlon Byrd auto. Is it dumb to buy stuff like this because they’ll never really be worth anything in the future?

    Is it so wrong to purchase things because I like them and for no other reason?

    Its not ALL about future value to everyone. MOST things you’ll ever buy in your lifetime will decrease in value over time, but that doesn’t stop people from buying cars, or video games, or whatever else. Why should it deter people from spending money on baseball cards?

  11. All this is – IS CONTRIVED VALUE – IT GIVES THE ILLUSION OF VALUE – 1/1 OF One Million one of ones.

  12. I just got back into card collecting in 2005 and it didn’t take me too long to see how the value of new cards go. Good thing I hung on to all those mediocre young guns that I can’t even give away now.

    It just doesn’t pay to buy new boxes or packs because you can get just about any card in the set for less than the price of one box on eBay. How do you justify buying boxes anymore?

    I don’t like not supporting the new products, but I just can’t bring myself to do it when you see the prices on eBay. I still buy new insert sub set cards on eBay, but buying boxes is rare now compared to me spending about $200 a week a few years ago.

  13. I have to question some of your research for this. If you look at just the Michael Jordan 1/1s you will see a great many of them were made by National Sportscard Authenticators. Basically they are trying to manufacture artificial scarcity by making a horde of pre-slabbed game used cards and labeling all of them 1/1. Its a scam, really. If you remove them I doubt there are more than a dozen 1/1 Jordans on eBay.

    Then you have the people who slap 1/1 in the title to get more hits from people looking for 1/1 cards. Some of these are your eBay 1/1 cards where the card is numbered to the players jersey or birthday or whatever. Some are flat out lies to get more hits.

    In the first 50 Jordan 1/1 cards when I looked only 3 were truly numbered 1/1. Two were liars and the rest were NSA slabbed scams.

    Glancing at some of the other players you listed I see a lot of the same. Less of the NSA scam, but a lot of fake 1/1 claims.

    I understand the point you are making, but the number of 1/1 cards in existence is not near as large as you are making it out to be. Also, once I buy a 1/1 for my collection, it is off the market unless I decide to get rid of it. At any moment the number of true 1/1 cards is limited. If you fancy yourself a Michael Jordan Super Collector, every 1/1 card you do not buy when it is available is a card that will likely forever elude you.

  14. I find it amazing how some collectors never mention how weak the dollar is, and how it effects our collections.

  15. Cool I have been waiting for an economist.

    I have a question thats been on my mind. Explain the impact hyperinflation will have on the value of our collections?


  16. Daniel,

    That may be the case, but it doesn’t change the simple that the prices of 1/1’s are usually significant higher than the long-term value of the underlying signature/patch.

    SportscardUncensored just reported that someone paid $2650 for a Mark Sanchez 1/1, for example. Now even if Sanchez becomes the second coming of Joe Namath and wins the Jets a Super Bowl, neither his autograph nor a piece of his uniform is ever likely to be worth more than $50, since he has about 50 years left of autograph signing and probably 10+ years left of game-used equipment generation.

    Taking a couple of items that are not scarce and slapping a 1/1 label on them does not suddenly change their relative scarcity and make them instantly valuable.

  17. mfw13,

    A couple of points. First, what you say is generally true, but not for rookie cards. Sanchez could turn out to be an immortal and play for a thousand generations, but he will only ever have one year of rookie cards and a very limited supply of rookie materials and autographs. People are hard wired to remember and value firsts.

    Second, the scarcity is not the material or the autograph, but the 1/1 label. For some older players the materials or autographs are rare, but for modern players the 1/1 is what creates the scarcity.

    Finally, I do agree that, as time goes on there will be a general decline in value as more collectors can get an auto or patch card. I expect super collectors will still want one of every card and keep the bottom from collapsing on the major stars (the Jeter, Manning, Kobe, Crosby class players).

    It will be very interesting to see how the market develops in the future.

  18. Obviously “taking a couple of items that are not scarce and slapping a 1/1 label on them” DOES “make them instantly valuable”. You proved that point in your comment. Some dude paid $2650 for the Mark Sanchez card! Is $2650 not “valuable”? Your logic is horrible.

    We get it. You don’t like expensive cards, and you wish that all cards were made the way they were 20 years ago. I hope there aren’t 100 more posts in the queue all trying to make that same point.

  19. Actually Dave, I like expensive cards just fine and have quite a few cards in my collection that are worth over a thousand dollars. Of course, these are primarily cards from the 50’s and 60’s, which have held their value over the long term and and/or are truly scarce, like my 1970 Willie McCovey cloth sticker, a true 1/1.

    Also, do not confuse the market price with long-term value. Somebody may have paid $2650 for it right now, but I’ll eat my hat if the card is worth even half of that in ten years.

  20. Another thing that throws off the logic/reasoning here is failing to consider the ‘big picture’. Let’s say there are 500 TRUE one-of-ones on ebay right now, and we’ll define “true” as being labeled “1/1” by the manufacturer. No jersey numbers or last card printed, etc.

    Also, this hypothetical. There may be more, there are probably less. I don’t feel like sorting through each listing.

    500 may seem like a TON to be out there given how scarce they should be, but if you look at the big picture of cards available, that number is miniscule. There are millions and millions of cards available to purchase, but of course they’re not available on ebay – nobody would buy them.

    I don’t even know how to wrap up the point I’m trying to make, but of course you’re seeing a lot of ‘scarce’ cards for sale – those are the only ones people would buy, and there really is only one viable place to sell them (ebay), so of course they’re all there.

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