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Benford's law and naturally occurring prices in certain ebaY auctions

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  • David Giles

Abstract

We show that certain winning bids for certain ebaY auctions obey Benford's Law. One implication of this is that it is unlikely that these bids are subjected to collusion among bidders, or 'shilling' on the part of sellers. Parenthetically, we also show that numbers from the naturally occurring Fibonacci and Lucas sequences also obey Benford's Law.

Suggested Citation

  • David Giles, 2007. "Benford's law and naturally occurring prices in certain ebaY auctions," Applied Economics Letters, Taylor & Francis Journals, vol. 14(3), pages 157-161.
    • Handle: RePEc:taf:apeclt:v:14:y:2007:i:3:p:157-161
    DOI: 10.1080/13504850500425667
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    1. De Ceuster, Marc J. K. & Dhaene, Geert & Schatteman, Tom, 1998. "On the hypothesis of psychological barriers in stock markets and Benford's Law," Journal of Empirical Finance, Elsevier, vol. 5(3), pages 263-279, September.
    2. Giles, David E., 2005. "Testing for a Santa Claus effect in growth cycles," Economics Letters, Elsevier, vol. 87(3), pages 421-426, June.
    3. Canessa, Enrique, 2003. "Theory of analogous force on number sets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 328(1), pages 44-52.
    4. Pietronero, L. & Tosatti, E. & Tosatti, V. & Vespignani, A., 2001. "Explaining the uneven distribution of numbers in nature: the laws of Benford and Zipf," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 293(1), pages 297-304.
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    More about this item

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Econometric and Statistical Methods; Specific Distributions
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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