Why Do Sellers At Auctions Bid For Their Own Items? Theory And Evidence
AbstractThis paper illustrates, both theoretically and empirically, the determinants of seller bidding at auctions. Based on search theoretical considerations, seller bids are explained as the seller’s rejection of submitted price offers that fall short of his reservation price. The search model allows to derive testable implications on the seller’s bidding behavior. Using a unique data set from German auction houses, the estimation results provide evidence that supports the search theoretical implications. For example, seller bidding is complementary to the presence of bidding rings at auction. Moreover, art and antique auctions turn out to be particularly susceptible to seller bidding practices.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 56 (2004)
Issue (Month): 4 (October)
Auctions; Reservation Price; Search Model; Seller Bids.;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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- Calin Valsan & Robert Sproule, 2008. "Reservation Prices And Pre-Auction Estimates: A Study In Abstract Art," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 10(24), pages 257-272, June.
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