The Tigers, who are now 1-1, move to the loser's bracket where they will take on the host school, College of Charleston, in a game scheduled to tip off at 6:30 p.m. CST on Friday.
Murray State, which improved to 2-0, will take on St. John's, which defeated College of Charleston 64-53 in the eight-team event that will run through Sunday.
Barbee said that his Tigers performed timidly in sharp contrast to the Racers. "They play with the swagger of a team that won 32 games (last year)," he said. "They play with the confidence, the discipline and the moxie of a team that won 32 games and they expect to win by how they play and compete.
"I thought the bottom line was we came out scared," Barbee said. "The bottom line is when you play scared, or nervous or frightened you are tense and you are a step behind on everything the other team is doing. That is what took place so give Murray State credit.
"I am disappointed we didn't show more fight early in the game," the coach added. "I have to evaluate everything--how I am coaching this team. I have to evaluate who I am playing and why I am playing guys because for some reason we aren't getting it.
"We are trying to play some young guys, but it is disappointing," he said. "It wasn't the young guys who got us in a hole. It was the veteran guys I was trying to stick with early to see if they would fight back, and unfortunately they didn't.
"Like I told our team, one game does not make our season, understand what happened tonight, learn from it and then forget about it because we have to come back out in less than 24 hours and find a way to get this next game."
At halftime the Tigers trailed 45-19 as they allowed the Racers to hit 8-13 three-pointers and 15-26 field goals. Meanwhile, the Tigers were 0-5 at the break on threes and hit just 8-30 field goals.
In addition to horrible shooting, the Tigers turned the ball over 15 times to just seven for the Racers to help make the first half hole deeper.
The Racers weren't quite as hot in the second half, but had such a large cushion it didn't matter.
For the game Murray State hit 52.9 of its field goals (27-51) and 47.8 percent of its threes (11-23) on the way to the victory.
Preseason All-American guard Isaiah Canaan led the Racers with 26 points and Stacy Wilson added 18 points.
Auburn hit just 33.3 percent from the field (20-60) and 2-10 threes. Auburn got to the foul line 30 times, but made just 17. The Racers hit 14-16 free throws.
Auburn out-rebounded Murray State 44-28 and had 17 turnovers, three fewer than the Racers.
Asauhn Dixon-Tatum came off the bench to tie Rob Chubb for team-high scoring honors for the Tigers. Each had 12 points. Dixon-Tatum added nine rebounds while Chubb had seven despite missing most of the opening half with foul trouble.
Frankie Sullivan gets medical attention.
Senior guard Frankie Sullivan scored seven points, but had to leave the game early in the second half after diving into the scorer's table. He suffered a cut on his right arm and was taken to a local hospital for stitches.