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Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcome

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  • Nicola Lacetera
  • Bradley J. Larsen
  • Devin G. Pope
  • Justin R. Sydnor

Abstract

Auction design has been studied extensively; however, within a given design, does the process of how an auction is conducted matter as well? We address this question by looking for heterogeneity in the performance of auctioneers in English auctions. We analyze over 850,000 wholesale used car auctions and find significant differences across auctioneers in outcomes for otherwise similar cars. The performance heterogeneities are stable across time and correlate with subjective evaluations by the auction house. We discuss the mechanisms driving differential performance and find evidence suggesting a role for tactics that generate bidder excitement or urgency.

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  • Nicola Lacetera & Bradley J. Larsen & Devin G. Pope & Justin R. Sydnor, 2016. "Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcome," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 195-229, November.
    • Handle: RePEc:aea:aejmic:v:8:y:2016:i:4:p:195-229
    Note: DOI: 10.1257/mic.20150020
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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