This 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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Volume (Year): 56 (2004) Issue (Month): 4 (October) Pages: 312–337 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models D44 - Microeconomics - - Market Structure and Pricing - - - Auctions D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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