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Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcome

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  • Nicola Lacetera
  • Bradley J. Larsen
  • Devin G. Pope
  • Justin R. Sydnor

Abstract

Auction design has been studied extensively; however, within a given design, does the process of how an auction is conducted matter as well? We address this question by looking for heterogeneity in the performance of auctioneers in English auctions. We analyze over 850,000 wholesale used car auctions and find significant differences across auctioneers in outcomes for otherwise similar cars. The performance heterogeneities are stable across time and correlate with subjective evaluations by the auction house. We discuss the mechanisms driving differential performance and find evidence suggesting a role for tactics that generate bidder excitement or urgency.

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  • Nicola Lacetera & Bradley J. Larsen & Devin G. Pope & Justin R. Sydnor, 2016. "Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcome," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 195-229, November.
  • Handle: RePEc:aea:aejmic:v:8:y:2016:i:4:p:195-229
    Note: DOI: 10.1257/mic.20150020
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    Citations

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    1. repec:bla:randje:v:50:y:2019:i:1:p:93-120 is not listed on IDEAS
    2. Barbosa, Klenio & Straub, Stéphane, 2017. "The Value of Revolving Doors in Public Procurement," TSE Working Papers 17-873, Toulouse School of Economics (TSE).
    3. Lu, Y. & Gupta, A. & Ketter, W. & van Heck, H.W.G.M., 2017. "Information Transparency in B2B Auction Markets: The Role of Winner Identity Disclosure," ERIM Report Series Research in Management ERS-2017-006-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. repec:bla:finmgt:v:47:y:2018:i:4:p:833-864 is not listed on IDEAS
    5. Dominic Coey & Bradley Larsen & Kane Sweeney, 2019. "The bidder exclusion effect," RAND Journal of Economics, RAND Corporation, vol. 50(1), pages 93-120, March.
    6. Tanjim Hossain & Fahad Khalil & Matthew Shum, 2016. "Auctioneers as Market Makers: Managing Momentum in Chittagong Tea Auctions," CESifo Working Paper Series 5843, CESifo Group Munich.
    7. repec:eee:jobhdp:v:151:y:2019:i:c:p:132-149 is not listed on IDEAS
    8. Brunella Bruno & Emilia Garcia‐Appendini & Giacomo Nocera, 2018. "Experience and Brokerage in Asset Markets: Evidence from Art Auctions," Financial Management, Financial Management Association International, vol. 47(4), pages 833-864, December.
    9. repec:bla:jindec:v:65:y:2017:i:3:p:597-622 is not listed on IDEAS
    10. Yuta Kikuchi & Ryo Nakajima, 2017. "Evaluating Professor Value-added: Evidence from Professor and Student Matching in Physics," Keio-IES Discussion Paper Series 2017-007, Institute for Economics Studies, Keio University.
    11. Nicola Lacetera & Bradley J. Larsen & Devin G. Pope & Justin R. Sydnor, 2016. "Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcome," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 195-229, November.
    12. Janne Tukiainen, 2017. "Effects of Minimum Bid Increments in Internet Auctions: Evidence from a Field Experiment," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 597-622, September.
    13. Philip M. Fernbach & Steven A. Sloman & Robert St. Louis & Julia N. Shube, 2013. "Explanation Fiends and Foes: How Mechanistic Detail Determines Understanding and Preference," Journal of Consumer Research, Oxford University Press, vol. 39(5), pages 1115-1131.
    14. repec:eee:joepsy:v:69:y:2018:i:c:p:61-86 is not listed on IDEAS
    15. Bradley Larsen, 2014. "The Efficiency of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions," NBER Working Papers 20431, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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