What's a Fair Price?

T hat was the question asked and answered at a recent auction for this rare, 125-year-old stamp. It's called the "Treskilling Yellow", and its claim to fame is that it should have been green. It was recently sold to a secretive

investor group at an unknown price, but the last time it publicly changed hands was in 1996 when it went for the equivalent of (hold on to your hat) $2.3 million. Those who should know say that despite the undisclosed price of its recent sale, this remains the world's most expensive stamp.

There's no question the price was high. But was it fair? At first glance, that's more difficult to answer.

Let's see. There was a willing buyer, which apparently is happier now in possession of the stamp than it was with two or three million bucks. And there was a willing seller, who (much more understandably) is happier having traded his or her yellow scrap for greenbacks. Both parties believe they are better off having made this transaction. Sounds fair to me.

It's natural for people to think of low prices as "fair" and high prices as "unfair." But where, exactly, does one draw the line between "low" and "high"? The answer differs by category, by product, by geography, by economic conditions, and by a host of other factors that no individual person is fit to judge, other than for himself. A "fair" price is neither high nor low; it's simply the price at which willing buyers and sellers meet.

Personally, I think the group that bought the stamp is crazy. Unless they can find someone crazier to pay even more for it and make out like bandits.

Now that would be unfair.

Steve McKee is president of McKee Wallwork Cleveland and author of When Growth Stalls: How It Happens, Why You're Stuck, and What to Do About It . Find him on Twitter and LinkedIn.