The Role Of The Bidding Process In Price Determination: Jump Bidding In Sequential English Auctions
Abstract"This paper uses data collected from a series of public auctions of used cars in New Jersey to examine how strategic bidding affects price determination in open-outcry English auctions. "Jumps" in the bidding, which occur when a new offer exceeds the old offer by more than the minimum bid increment, are highly pervasive and consistently related to the item's presale estimated price. The size of the jumps is not affected by the selling order, however. This jump bidding pattern suggests that open-outcry auctions are more appropriately interpreted with models that assume common-item valuations rather than models assuming private valuations. "("JEL "D44) Copyright (c) 2007 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 46 (2008)
Issue (Month): 3 (07)
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Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2011.
"Jumping and sniping at the silents: Does it matter for charities?,"
Journal of Public Economics,
Elsevier, vol. 95(5), pages 395-402.
- Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2011. "Jumping and sniping at the silents: Does it matter for charities?," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 395-402, June.
- Yaron Raviv, 2009. "Uncertainty and Auction Outcomes: Evidence from Used Car Actions," Review of Industrial Organization, Springer, vol. 34(4), pages 327-347, June.
- Khoroshilov, Yuri, 2012. "Preemptive bidding in takeover auctions with affiliated values," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(4), pages 395-401.
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