Mix for sure.

I could never understand how merchants automatically knew what goods were stolen. I could see marking goods as stolen in your inventory since you needed to fence a certain amount of goods to advance with the thieves, but having merchants ignore stolen goods is just plain wrong.

Rarity and price shouldn't have much to do with merchants thinking items are stolen. People sell rare and expensive items all the time to stores and stuff. Not that uncommon. It should be unique items that are flagged.

A mix. There shouldn't be psychic merchants. Local merchants will recognize a stolen good, whereas non-local merchants are not likely to recognize if the sword you're selling was shoplifted eight towns away or came off a bandit.

Agree that only high priced, marked and unique items should require the services of a fence. But to make things more interesting, and to capture the flavor of real theft, how 'bout the introduction of "heat" whereby stolen items would attract attention, depending on the (previous) ownership of the item, the item's worth etc. - i'm talking about full blown city-guard frisking and searching of premises if you've stolen the King's signet. So now even possessing the stolen item may attract risk. And also please...if you dump something on the floor, make sure people - guards & civilians - NOTICE it, so you can't just grab a longsword, throw it on the floor, and pick it up after the guards are gone.

I like this idea