Irrational Card Pricing

[EnlightenedBulbasaur]

We all know that the price of Pokemon cards is related to supply and demand. So of course, cards become expensive when there is some combination of a low supply and a high demand for them.

So when considering the cards of a particular set, of course we find that the most expensive ones either have a high demand (Charizard in any set, etc.) or a low supply (Base Set Chansey, etc.).

What I find fascinating is the situation when cards originally become more expensive because they once had a low supply relative to other cards in the set but continue to be priced higher than the other cards of the set even when the supply becomes comparable to other cards in the set.

Consider the case of the PSA 10 1st edition Jungle Kangaskhan. 2-3 years ago, this card had an extremely low population report. For whatever reason, its population was less than half that of any other card in the set. This very low supply led to the Kangaskhan being priced much higher than any other card in the set.

But as time went on, the population of PSA 10 1st edition Kangaskhan cards fell in line with several other PSA 10 1st edition cards in the Jungle set. Here’s a population report from most rare to most common:

Clefable - 60
Wigglytuff - 62
Vaporeon - 62
Kangaskhan - 62Snorlax - 66
Victreebel - 79
Nidoqueen - 86
Pinsir - 91
Vileplume - 91
Mr. Mime - 93
Pidgeot - 93
Venomoth - 94
Electrode - 95
Scyther - 109
Jolteon - 120
Flareon - 157

We see that, despite once being clearly the rarest card in the set, Kangaskhan is now in the same tier with Clefable, Wigglytuff, Vaporeon, and Snorlax when it comes to supply.

Now, the interesting thing is that I could make the case that Kangaskhan is the least popular out of all 5 of these Pokemon. Snorlax is super popular, Vaporeon is an Eeveelution, Wigglytuff is an evolution of one of the most iconic Pokemon, and Clefable is decently popular too.

So, there would be no reason to think that Kangaskhan is more expensive than these other cards.

And yet, a quick price check guide check on PSA will give us suggested prices of (PokemonPrice.com most recent sale in parentheses):

**Kangaskhan - $800 (last sale: $623 in April 2019)**Vaporeon - $750 (last sale: $686 in February 2019)
Snorlax - $750 (last sale: $407 in February 2019)
Wigglytuff - $500 (last sale: $875 in August 2019)
Clefable - $400 (last sale: $330 in December 2018)

So essentially, the market is saying that Kangaskhan is worth double Clefable… even though Clefable actually has a lower supply now, and I’m fairly certain that Kangaskhan is not notably more popular than Clefable as a Pokemon.

The card is being carried solely on the fact that it used to have a lower supply, which created the perception that it was the most valuable card in the set. This perception has simply carried over and still makes it sell for more than other cards in the set.

While some people may say that “a card is worth whatever the market says it’s worth,” and of course there is truth in that, I would call this irrational card pricing. My argument is that when a card is irrationally priced, the price will inevitably correct over time, but the market can often be slow to react.

Case and point, in this very instance, the price gap between the Kangaskhan and the other cards in the set used to be more extreme than it is now (even after the population of Kangaskhans caught up with the other cards), but it has been correcting over time. Nonetheless, it has not yet reached a place in which the card is rationally priced.

My advice is to avoid buying cards when they are irrationally priced, unless you feel that all the cards in a particular set may increase in price. It is better to simply wait as the market corrects itself over time. Conversely, it may make sense to sell a card that is irrationally priced, but if you feel that all the cards in the set will continue to increase in price then it may not necessarily make sense to do so.

Put it another way - someone who regularly buys and sells Pokemon cards should either be desperately trying to sell all of their Kangaskhans for the current market value OR they should be trying to buy all available Clefables at market value, because there is no rational reason for Kangaskhan to be selling for double what Clefable is selling for. The market will continue to correct this over time, but it may still be years away from making the full correction.

What are your thoughts on irrational card pricing?

[grandgengar]

Yeah I think that kangaskan being at that price is a little absurd and the market will correct it. All it takes is a few sales at a lower price point to make the market realize that the card really isn’t worth as much.

[EnlightenedBulbasaur]

@grandgengar

Yeah I think that kangaskan being at that price is a little absurd and the market will correct it. All it takes is a few sales at a lower price point to make the market realize that the card really isn’t worth as much.

Inevitably, that’s how the market does correct itself over time. I just find cases like the Jungle Kangaskhan fascinating because the population caught up with the Clefable/Wigglytuff/Snorlax/Vaporeon a long time ago, and yet for a long time still sold for much more than than those other cards despite being a less popular Pokemon than the other ones mentioned. But sales for all of these cards are infrequent enough that it takes the market quite a while to truly correct itself.

But a wise buyer/seller can do well for themselves when recognizing when a card is priced irrationally, years before the market makes a full correction.

[genchiro]

@grandgengar

Yeah I think that kangaskan being at that price is a little absurd and the market will correct it. All it takes is a few sales at a lower price point to make the market realize that the card really isn’t worth as much.

I think it’s not just a few sales. It often happened that a seller flooded the market with a certain card and the price plummeted. After a while, it went up again. So I’m very curious to see if this will correct a former established price. In my opinion this depends on how well informed the buyers are and what the reasons for the price are. Otherwise, they will just assume that this is the given price and just keep on paying it.

[lamplamp]

I agree with what you’re saying in general, I think people can get used to the perceived price of a card being stuck within a set range which can add to the period of time that a card is “overvalued”. I would say though that if you are in the sellers position it is definitely in your benefit to try to keep the price (even if it is overpriced) as high as possible. I’ve seen plenty of situations where sellers will list cards over the average market price simply because their fellow sellers are doing the same. If you are the buyer in that situation there isn’t much you can do but wait and hope that someone decides to sell closer to the market average.

[EnlightenedBulbasaur]

@lamplamp

I agree with what you’re saying in general, I think people can get used to the perceived price of a card being stuck within a set range which can add to the period of time that a card is “overvalued”. I would say though that if you are in the sellers position it is definitely in your benefit to try to keep the price (even if it is overpriced) as high as possible. I’ve seen plenty of situations where sellers will list cards over the average market price simply because their fellow sellers are doing the same. If you are the buyer in that situation there isn’t much you can do but wait and hope that someone decides to sell closer to the market average.

As a seller your goal is to maximize how much you get for the card, so obviously a seller will try to sell their card for at least what the market says the card is worth.

But a wise and patient buyer can recognize when a particular card is irrationally priced compared to other cards in the set and, if they have the patience, can make the decision to simply wait it out.

The reason that the market can be so slow to correct itself is because, indeed, many buyers don’t have the patience to wait things out, especially when sales for these cards pop up so rarely.

But slowly, over time, the market will correct itself… not every individual sale will reflect this, but the trend lines will move in the direction of rationality.

It should also be said that patience when it comes to irrational pricing is not only a virtue of a buyer, but it can also be a virtue of the seller.

For example, one could make the case that the Jungle Kangaskhan isn’t necessarily overpriced but rather that the Jungle Clefable is underpriced. In this case, it is incumbent upon a seller to wait out the market until the price of the Clefable rises to be more in line with how other cards in the set like the Kangaskhan are priced.

[pfm]

I like the analysis but I would warn that availability, that is the percentage of the population available within the market, is the real variable of interest and pop is only going to be, in general, proportional.

So if the amount of kangaskhan that graded 10 and hit the market is proportionally lower, I would argue the price is not irrational. I haven’t checked to see if this is true myself, but I thought it was worth mentioning.

[lamplamp]

@EnlightenedBulbasaur

@lamplamp

I agree with what you’re saying in general, I think people can get used to the perceived price of a card being stuck within a set range which can add to the period of time that a card is “overvalued”. I would say though that if you are in the sellers position it is definitely in your benefit to try to keep the price (even if it is overpriced) as high as possible. I’ve seen plenty of situations where sellers will list cards over the average market price simply because their fellow sellers are doing the same. If you are the buyer in that situation there isn’t much you can do but wait and hope that someone decides to sell closer to the market average.

As a seller your goal is to maximize how much you get for the card, so obviously a seller will try to sell their card for at least what the market says the card is worth.

But a wise and patient buyer can recognize when a particular card is irrationally priced compared to other cards in the set and, if they have the patience, can make the decision to simply wait it out.

The reason that the market can be so slow to correct itself is because, indeed, many buyers don’t have the patience to wait things out, especially when sales for these cards pop up so rarely.

But slowly, over time, the market will correct itself… not every individual sale will reflect this, but the trend lines will move in the direction of rationality.

It should also be said that patience when it comes to irrational pricing is not only a virtue of a buyer, but it can also be a virtue of the seller.

For example, once could make the case that the Jungle Kangaskhan isn’t necessarily overpriced, and that rather the Clefable is underpriced. In this case, it is incumbent upon a seller to wait out the market until the price of the Clefable rises to be more in line with how other cards in the set like the Kangaskhan are priced.

Oh for sure, I agree that patience is key. I know that I’ve overpaid on certain cards when the supply has been low and I finally found one for sale. Kangaskhan might have one other thing going for it in that it was a very playable card back in the day so there might have been less pristine copies available due to some players wanting to flex by having the 1st Ed. Holo versions in their decks.

[EnlightenedBulbasaur]

@pfm

I like the analysis but I would warn that availability, that is the percentage of the population available within the market, is the real variable of interest and pop is only going to be, in general, proportional.

So if the amount of kangaskhan that graded 10 and hit the market is proportionally lower, I would argue the price is not irrational. I haven’t checked to see if this is true myself, but I thought it was worth mentioning.

What you say, in general, is true. However, when it comes to the particular example I mentioned in the OP, I highly doubt that the other cards with similar population reports (Vaporeon, Snorlax, Wigglytuff, Clefable) are “more available” than the Kangaskhan.

Compare the Kangkashan to Vaporeon, for example. These two cards have exactly the same population report (62). Pretty much the only people collecting the Kangaskhan are those who want a complete Jungle set. Whereas the Vaporeon is also a target for Eeveelution collectors, and some people may even choose to buy the card individually because they really like Vaporeon. I would highly doubt Kangaskhan is getting love from anyone outside the collector who wants 100% of Jungle, and this collector needs the Vaporeon just as much as the Kangaskhan.

[pfm]

@EnlightenedBulbasaur

@pfm

I like the analysis but I would warn that availability, that is the percentage of the population available within the market, is the real variable of interest and pop is only going to be, in general, proportional.

So if the amount of kangaskhan that graded 10 and hit the market is proportionally lower, I would argue the price is not irrational. I haven’t checked to see if this is true myself, but I thought it was worth mentioning.

What you say, in general, is true. However, when it comes to the particular example I mentioned in the OP, I highly doubt that the other cards with similar population reports (Vaporeon, Snorlax, Wigglytuff, Clefable) are “more available” than the Kangaskhan.

You’re probably right. I just wanted to mention it as a side point in case people want to use this type of analysis for a different example.

[shizzlemetimbers]

I think Vaporeon has actually taken the mantle now pretty sure it is a 4 figure card atm. I would say that Kanga has adequately settled IMO, the previous sale points make it less likely that you will ever pick up Kanga for ‘cheap’. Also interesting that of the top 5 cards 4 are the pesky colourless type.

[EnlightenedBulbasaur]

@shizzlemetimbers

I think Vaporeon has actually taken the mantle now pretty sure it is a 4 figure card atm. I would say that Kanga has adequately settled IMO, the previous sale points make it less likely that you will ever pick up Kanga for ‘cheap’. Also interesting that of the top 5 cards 4 are the pesky colourless type.

I would agree that Vaporeon would sell for more today than a Kangaskhan, because the market has been correcting itself. But for the better part of the last 2 years, Kangaskhan would have sold for substantially more than Vaporeon even during a period of time when the population reports for the cards were nearly identical.

And yeah, it is interesting that 4 of the top 5 are Colorless, and even the Vaporeon has very light coloring like you would typically see on a Colorless card. My assumption is that the scratches / flaws on these cards are much more visible on the holofoil.

[Cerulean]

@EnlightenedBulbasaur

@shizzlemetimbers

I think Vaporeon has actually taken the mantle now pretty sure it is a 4 figure card atm. I would say that Kanga has adequately settled IMO, the previous sale points make it less likely that you will ever pick up Kanga for ‘cheap’. Also interesting that of the top 5 cards 4 are the pesky colourless type.

I would agree that Vaporeon would sell for more today than a Kangaskhan, because the market has been correcting itself. But for the better part of the last 2 years, Kangaskhan would have sold for substantially more than Vaporeon even during a period of time when the population reports for the cards were nearly identical.

And yeah, it is interesting that 4 of the top 5 are Colorless, and even the Vaporeon has very light coloring like you would typically see on a Colorless card. My assumption is that the scratches / flaws on these cards are much more visible on the holofoil.

Yep. This is exactly why. Same reason why Chansey is a difficult grade in Base Set, why Dark Magneton is such a tough one to get in Team Rocket, Typhlosion 17, etc.

[jcincy101]

@Cerulean

@EnlightenedBulbasaur

I would agree that Vaporeon would sell for more today than a Kangaskhan, because the market has been correcting itself. But for the better part of the last 2 years, Kangaskhan would have sold for substantially more than Vaporeon even during a period of time when the population reports for the cards were nearly identical.

And yeah, it is interesting that 4 of the top 5 are Colorless, and even the Vaporeon has very light coloring like you would typically see on a Colorless card. My assumption is that the scratches / flaws on these cards are much more visible on the holofoil.

Yep. This is exactly why. Same reason why Chansey is a difficult grade in Base Set, why Dark Magneton is such a tough one to get in Team Rocket, Typhlosion 17, etc.

And the yanma, and the Lugia, white = scratch city

[gemmintpokemon]

www.elitefourum.com/t/grading-theory-centering-on-lighter-cards/15322/1

Full circle.

[chrispy]

None of these cards is much rarer than the others. You kinda already touched on why it was the “rarest”/least graded already - because it was the least popular and less people gave a fuck about it. Enter PSA population reports, this generates hype that it’s harder to get than the others - people love to buy into hype and rarity so the prices surge for that card. What happens when prices surge for a card? Suddenly it’s not so rare any more because everyone and their grandmother dusts off their pokemon boxes and starts grading them.

This is why almost every set cycle’s pop info is bullshit in my opinion. As for why it hasn’t gone down in price? Because sellers can point at higher sales and claim its valued higher. Simple as that. As soon as a few start selling at a lower pricepoint, the market “corrects”.

P.S. This is also the reason why, for some higher end cards that aren’t as limited as people may think, the sales are done privately. That way less will pop up and inflate the market leading to a crippling in pricepoint. That, and ofc to evade some fees.

[smpratte]

@gemmintpokemon

www.elitefourum.com/t/grading-theory-centering-on-lighter-cards/15322/1

Full circle.

Zack is like, I have been waiting 3 years for this moment!

[megazone]

@smpratte

@gemmintpokemon

www.elitefourum.com/t/grading-theory-centering-on-lighter-cards/15322/1

Full circle.

Zack is like, I have been waiting 3 years for this moment!

He had that link ready in a notepad file and every day for the past 3 years when he logged on: “Nope, not today.”

[jcincy101]

I just sold my PSA 10 1st ed Snorlax for $1,100.

[EnlightenedBulbasaur]

@jcincy101

I just sold my PSA 10 1st ed Snorlax for $1,100.

It seems like Jungle/Fossil PSA 10 1st edition has been significantly on the rise within the last few months. Not sure what accounts for the sudden spike, but I always believed that the prices would rise eventually. (Obviously the fact that the booster boxes have seen their value increase significantly is directly related to this)