The Declining Price Effect in Sequential Auctions: What Theory Does Not Predict
AbstractThis paper studies different explanations given for the "price decline anomaly" in sequential auctions, a phenomenon also known as the "afternoon effect". It surveys the dedicated theoretical models and then explores the influence of the institutional or market characteristics (of the sale) on the price trend. Next , it presents different methods used for measuring price trends and analytically identifies the differences between them. Finally, data from wine auctions are used to show that different methods may lead to opposite trends from the same data and that the number of identical objects being sold influences the price trend.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 1999-13.
Length: 46 pages
Date of creation: Sep 1999
Date of revision:
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multiple unit auctions; price decline; index Numbers; bootstrap simulations;
Find related papers by JEL classification:
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Grigorieva Elena & Herings P. Jean-Jacques & Müller Rudolf & Vermeulen Dries, 2009.
"Inefficiency of equilibria in query auctions with continuous valuations,"
023, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
- Grigorieva, Elena & Herings, P. Jean-Jacques & Müller, Rudolf & Vermeulen, Dries, 2006. "Inefficiency of equilibria in query auctions with continuous valuations," Research Memoranda 017, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
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