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Declining Values and the Afternoon Effect: Evidence from Art Auctions

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Author Info
Alan Beggs
Kathryn Graddy

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Abstract

We study the order of sale in art auctions. The final bid relative to the auctioneer's estimated price declines throughout the course of an auction. A theoretical model shows that in an auction ordered by declining valuation, even in the presence of risk-neutral strategic bidders, the price received relative to the estimate for later items in an auction should be less than the price relative to the estimate for earlier items. Furthermore, ordering heterogeneous items by value maximizes revenue for the auctioneer.

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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 28 (1997)
Issue (Month): 3 (Autumn)
Pages: 544-565
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Handle: RePEc:rje:randje:v:28:y:1997:i:autumn:p:544-565

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This page was last updated on 2009-11-13.


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