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Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental examination

  • Grether, David M.
  • Plott, Charles R.

This paper reports on a large-scale field experiment testing strategies available to a seller participating in simultaneous competitive sequential ascending price automobile auctions. Every other week, the seller offered approximately 100 vehicles for sale in an auction environment in which several competing sellers offered on the order of 3000 vehicles. The experiment tested various sequences in which the seller could offer the vehicles, such as high values first or low values first. Surprisingly, and contrary to intuition drawn from the theory of single item and single seller auctions, the worst performing sequence from those tested is for the seller to order vehicles from highest to lowest values. The best sequence is to group the vehicles by type and offer the low valued vehicles first and then move to offer the higher valued vehicles.

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File URL: http://www.sciencedirect.com/science/article/B6V8F-4VWB13D-1/2/934e1d4db601ee2efede5abb35325139
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 71 (2009)
Issue (Month): 2 (August)
Pages: 75-88

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Handle: RePEc:eee:jeborg:v:71:y:2009:i:2:p:75-88
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
  2. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
  3. Plott, Charles R. & Salmon, Timothy C., 2004. "The simultaneous, ascending auction: dynamics of price adjustment in experiments and in the UK3G spectrum auction," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 353-383, March.
  4. Gerard J. van den Berg & Jan C. van Ours & Menno P. Pradhan, 2001. "The Declining Price Anomaly in Dutch Dutch Rose Auctions," American Economic Review, American Economic Association, vol. 91(4), pages 1055-1062, September.
  5. Orley Ashenfelter & Kathryn Graddy, 2003. "Auctions and the Price of Art," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 763-787, September.
  6. Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2006. "Best foot forward or best for last in a sequential auction?," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 176-194, 03.
  7. repec:cup:cbooks:9780521536721 is not listed on IDEAS
  8. Genesove, David, 1995. "Search at Wholesale Auto Auctions," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 23-49, February.
  9. Goeree, Jacob K. & Offerman, Theo & Schram, Arthur, 2006. "Using first-price auctions to sell heterogeneous licenses," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 555-581, May.
  10. Raviv, Yaron, 2006. "New Evidence on Price Anomalies in Sequential Auctions: Used Cars in New Jersey," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 301-312, July.
  11. repec:cup:cbooks:9780521551847 is not listed on IDEAS
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