I don’t want to buy games digitally anymore until I can actually own the game rather than the license. But then some freak on eBay is asking for $500 for a copy of Klonoa on the PS1. Then there are even more freaks who are willing to bid higher than that! Then the smaller retro games stores around me base their prices on these prices. There needs to be a price cap on this stuff. We can’t let all of the richest nerds control the economy.
It’s not much different than if you were to go to a business that buys and sells gold. They’ll have the current market rate on display and for video games eBay is a decent place to look for the market rate. With retro games there may at least be a bit of lag if they have prices directly on the games and not do something shady like looking up current prices at checkout.
What you said is definitely a problem though. The person selling a game should look at recent sold copies over the past 6ish months and consider the physical quality of the game in question to determine a price better; I don’t think a lot of shops put much time or thought into this aspect of it.
I don’t really know how you could do it any other way when retro games are a finite resource that isn’t being produced any more.