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On Fine Wine Pricing across Different Trading Venues

Author

Listed:
  • Oleksy, Paweł
  • Czupryna, Marcin
  • Jakubczyk, Michał

Abstract

This article examines how selected attributes of Bordeaux fine wines (producer, vintage, quality, bottle size, case, flaws, and transaction volume) affect prices in three types of trading venues: auctions, electronic exchange, and the over-the-counter (OTC) market. The findings indicate a price differentiation across the venues. Wine aging leads to relatively higher prices at auctions than on the electronic exchange or the OTC. There is a nearly linear relationship between prices and wine ratings, the strongest of which is found in the case of auctions. The bottle size effect is mostly positive for supersized formats and is the strongest on an electronic exchange and the weakest at auctions. The transaction volume negatively affects wine prices in all the trading venues. The simulation results facilitate the construction of more realistic trading models and may help traders make more informed decisions on the choice of a trading venue, depending on the wine characteristics. (JEL Classifications: D40, G12, Q14, L66)

Suggested Citation

  • Oleksy, Paweł & Czupryna, Marcin & Jakubczyk, Michał, 2021. "On Fine Wine Pricing across Different Trading Venues," Journal of Wine Economics, Cambridge University Press, vol. 16(2), pages 189-209, May.
    • Handle: RePEc:cup:jwecon:v:16:y:2021:i:2:p:189-209_5
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    Cited by:

    1. Young-Sik Kwak & Yoon-Jung Nam & Jae-Won Hong, 2021. "Effect of Online Collective Intelligence in Wine Industry: Focus on Correlation between Wine Quality Ratings and On-Premise Prices," Sustainability, MDPI, vol. 13(14), pages 1-20, July.
    2. Algieri, Bernardina & Iania, Leonardo & Leccadito, Arturo & Meloni, Giulia, 2023. "Message in a Bottle: Forecasting wine prices," LIDAM Discussion Papers LFIN 2023004, Université catholique de Louvain, Louvain Finance (LFIN).

    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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