IDEAS home Printed from https://ideas.repec.org/p/osf/socarx/e74gp_v1.html

Prices in Different Modes of Sale: Theory and RCT Evidence from Forced Sales

Author

Listed:
  • Dahlberg, Matz
  • Lundholm, Mikael
  • Nordin, Mattias
  • Schouten, Henk

Abstract

The mode of sale may affect prices not only through selling rules, but also by changing the composition of potential buyers. We study this mechanism by randomly varying the mode of sale in a three-year field experiment, conducted with the Swedish Enforcement Authority, that assigns foreclosed homes to auction or brokered sale. Assignment to brokered sales raise prices by about 15% relative to auctions. Using pre-treatment appraisals, we show that the foreclosure discount is mode-dependent: auction sales occur at a substantial discount, whereas brokered sales occur close to appraised market value. To explain why the discount arises in auctions, we develop a model in which auction participation barriers deter household buyers and create scope for resale-oriented professional buyers, lowering prices and potentially generating inefficient allocations. Historical individual-level foreclosure data support the mechanism: repeat buyers are present in auctions, purchase at larger discounts, and resell more quickly than other buyers.

Suggested Citation

  • Dahlberg, Matz & Lundholm, Mikael & Nordin, Mattias & Schouten, Henk, 2026. "Prices in Different Modes of Sale: Theory and RCT Evidence from Forced Sales," SocArXiv e74gp_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:e74gp_v1
    DOI: 10.31219/osf.io/e74gp_v1
    as

    Download full text from publisher

    File URL: https://osf.io/download/6a33b69ba22ce31ea94b1b0a/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/e74gp_v1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:socarx:e74gp_v1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://arabixiv.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.