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The Housing Market Impact of State-Level Anti-Discrimination Laws 1960-1970

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  • William J. Collins

    ()
    (Department of Economics, Vanderbilt University)

Abstract

In this paper, we study the incentives for market concentration of (online and traditional) auction houses. Would sellers and buyers be better off if two separate auction houses merged? We suppose that each auction house has a separate clientele of sellers and buyers. Sellers value their (identical) units at 0, while buyers have independent private values. Each auction house uses an ascending auction or by revenue equivalence any auction mechanism that allocates units efficiently among those buyers at that auction house. If no buyers are lost upon the merger, we find that efficiency gains increase, but that the expected sellers' revenue increases by more than the efficiency gains, leaving the buyers worse off. This result extends Bulow and Klemperer's (1996) insight that the competition of an additional bidder increases auction revenue by more than the ability to commit to an optimal auction with one less bidder; in our model, the extra competition created by having all of the bidders bid against each other after the merger more than offsets any supply effects. With an example, we show that if buyers choose whether to participate or not, it is possible upon a merger that so many buyers are lost, the sellers are actually worse off. We conclude that without transfers from sellers to buyers, the merger may or may not be profitable for sellers.

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File URL: http://www.accessecon.com/pubs/VUECON/vu03-w04.pdf
File Function: First version, 2003
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0304.

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Date of creation: Feb 2003
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Handle: RePEc:van:wpaper:0304

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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Keywords: Fair housing; residential segregation;

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References

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  1. John Yinger, 1998. "Evidence on Discrimination in Consumer Markets," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 23-40, Spring.
  2. Collins, William J. & Margo, Robert A., 2000. "Residential segregation and socioeconomic outcomes: When did ghettos go bad?," Economics Letters, Elsevier, vol. 69(2), pages 239-243, November.
  3. Donohue, John J, III & Heckman, James, 1991. "Continuous versus Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1603-43, December.
  4. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  5. Courant, Paul N., 1978. "Racial prejudice in a search model of the urban housing market," Journal of Urban Economics, Elsevier, vol. 5(3), pages 329-345, July.
  6. William J.Collins & Robert A. Margo, 2000. "Race and Home Ownership: A Century-Long View," Vanderbilt University Department of Economics Working Papers 0012, Vanderbilt University Department of Economics.
  7. David Neumark & Wendy A. Stock, 2001. "The Effects of Race and Sex Discrimination Laws," NBER Working Papers 8215, National Bureau of Economic Research, Inc.
  8. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
  9. Besley, Timothy & Case, Anne, 2000. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," Economic Journal, Royal Economic Society, vol. 110(467), pages F672-94, November.
  10. William M. Landes, 1968. "The Economics of Fair Employment Laws," Journal of Political Economy, University of Chicago Press, vol. 76, pages 507.
  11. Courant, Paul N. & Yinger, John, 1977. "On models of racial prejudice and urban residential structure," Journal of Urban Economics, Elsevier, vol. 4(3), pages 272-291, July.
  12. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  13. King, A Thomas & Mieszkowski, Peter, 1973. "Racial Discrimination, Segregation, and the Price of Housing," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 590-606, May-June.
  14. John F. Kain & John M. Quigley, 1975. "Housing Markets and Racial Discrimination: A Microeconomic Analysis," NBER Books, National Bureau of Economic Research, Inc, number kain75-1, July.
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Cited by:
  1. Boustan, Leah P. & Margo, Robert A., 2013. "A silver lining to white flight? White suburbanization and African–American homeownership, 1940–1980," Journal of Urban Economics, Elsevier, vol. 78(C), pages 71-80.
  2. Chatterji, Aaron K. & Seamans, Robert C., 2012. "Entrepreneurial finance, credit cards, and race," Journal of Financial Economics, Elsevier, vol. 106(1), pages 182-195.
  3. Robert A. Margo & Leah Platt Boustan, 2011. "White Suburbanization And African-American Home Ownership, 1940-1980," Boston University - Department of Economics - Working Papers Series WP2011-024, Boston University - Department of Economics.
  4. Leah Platt Boustan, 2013. "Racial Residential Segregation in American Cities," NBER Working Papers 19045, National Bureau of Economic Research, Inc.

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