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Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions

Author

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  • Roe, Brian E.
  • Wyszynski, Timothy E.

Abstract

We find sale prices and net revenues received by sellers in the Midwestern club pig market are higher at traditional face-to-face auctions than at comparable Internet auctions. The comparison overcomes adverse selection issues that commonly plague such analyses by using data from sellers that allocated pigs to both markets based solely on exogenous differences in dates between online and offline auctions. Furthermore, both auctions feature ascending price formats with ‘soft-endings’ and remaining quality variation is controlled by using detailed information on animal, seller and event characteristics. The results suggest that the higher prices and net revenues from traditional auctions are attributable to remaining differences in auction format and buyer pools. Furthermore, sellers may be willing to forgo higher revenues to capture the convenience and flexibility provided by Internet auctions, to reach buyers in other regions that face different seasonality in demand and to stimulate demand for privately negotiated sales.

Suggested Citation

  • Roe, Brian E. & Wyszynski, Timothy E., 2011. "Pigs in Cyberspace: A Natural Experiment Testing Differences between Online and Offline Club-Pig Auctions," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 102940, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:102940
    DOI: 10.22004/ag.econ.102940
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    Cited by:

    1. Holst, Gesa Sophie & Hermann, Daniel & Musshoff, Oliver, 2015. "Anchoring effects in an experimental auction – Are farmers anchored?," Journal of Economic Psychology, Elsevier, vol. 48(C), pages 106-117.
    2. Holst, G.S. & Hermann, D. & Mußhoff, O., 2015. "Anchoring Effects in an Experimental Auction," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.

    More about this item

    Keywords

    Agribusiness; Industrial Organization; Livestock Production/Industries; Marketing;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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