There isn't an externality here in the traditional sense. No one has a right to purchase anything at any particular price. Should people be disallowed from bidd

There isn't an externality here in the traditional sense. No one has a right to purchase anything at any particular price. Should people be disallowed from bidding in auctions because it increases the price of the item in question? No, people who live in geography absolutely should not control the land surrounding them. That's effectively land hoarding, and incentivizes deeply counterproductive NIMBYism. People should primarily control the land they own.