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Auction structure and court-ordered real estate sale outcomes: evidence from co-ownership dissolution cases in Turkey

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  • Ceyhun Elgin

    (Bogazici University)

Abstract

This study examines the effects of a significant legal change in Turkey’s real estate auction system on co-ownership dissolution outcomes. In 2013, Turkey shifted from a two-step auction process—with sequential starting prices set at 60% and 40% of a property’s appraised value—to a single-auction model with a starting price at 50%. Using a regression discontinuity design, this paper analyzes the effect of this shift on final sale prices, time to sale, and overall market efficiency in co-ownership dissolution cases. Findings indicate that the new single-auction model has led to significantly higher final sale prices and reduced time to sale, suggesting increased market efficiency. Additionally, results show that the policy change attracted more bidders and fostered a more competitive bidding environment, especially benefiting cases with multiple co-owners and lower-valued properties. This research provides empirical insights into the broader economic and legal implications of auction design in real estate markets and offers valuable guidance for policymakers considering similar reforms in other jurisdictions.

Suggested Citation

  • Ceyhun Elgin, 2025. "Auction structure and court-ordered real estate sale outcomes: evidence from co-ownership dissolution cases in Turkey," European Journal of Law and Economics, Springer, vol. 60(1), pages 55-80, August.
    • Handle: RePEc:kap:ejlwec:v:60:y:2025:i:1:d:10.1007_s10657-025-09847-x
    DOI: 10.1007/s10657-025-09847-x
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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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