"The Chabad House at Harvard, an Orthodox Jewish center, has placed a $6 million bid to purchase the building at 45 Dunster Street from the Fly Club," reports the Harvard Crimson. Never mind that when I graduated from Harvard 16 years ago the Chabad House at Harvard did not exist and the Fly Club, an all-male exclusive social club, might have then been more accurately called the WASP club, at least as far as I knew. What interests us here at FutureOfCapitalism.com about the story is this sentence from the Crimson story: "'This offer is above market value for the house and is very attractive for the Fly graduate board from a business perspective,' read an e-mail that was sent over a final club list."
The idea of an offer "above market value" doesn't make much sense. If $6 million is what it takes to cause the Fly Club to sell the building to the Chabad House, that is the market value. The market value is the price at which the owner agrees to sell it to the buyer, and the buyer agrees to buy it from the seller. Anything else is just an estimate of the market value, and a potentially unreliable one, at that. What have you been teaching these students, Professor Mankiw?