IDEAS home Printed from https://ideas.repec.org/p/ulb/ulbeco/2013-1701.html
   My bibliography  Save this paper

Absentee bidders and the declining price anomaly in wine auctions

Author

Listed:
  • Victor Ginsburgh

Abstract

The anomaly is concerned with the observation that in multiple-item auctions of identical objects, prices tend to decline over time. I show that in the case of wine auctions, which have been analyzed frequently, the anomaly is likely to be caused by the fact that most bids are entered by absentees, who use nonoptimal bidding strategies. Therefore, wine auctions can hardly be used to illustrate the standard multiple-object auction model.

Suggested Citation

  • Victor Ginsburgh, 1998. "Absentee bidders and the declining price anomaly in wine auctions," ULB Institutional Repository 2013/1701, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/1701
    as

    Download full text from publisher

    File URL: https://dipot.ulb.ac.be/dspace/bitstream/2013/1701/1/absentee-bidders.pdf
    File Function: absentee-bidders
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jane Black & David de Meza, 1992. "Systematic Price Differences Between Successive Auctionsare no Anomaly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(4), pages 607-628, December.
    2. Alan Beggs & Kathryn Graddy, 1997. "Declining Values and the Afternoon Effect: Evidence from Art Auctions," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 544-565, Autumn.
    3. Ashenfelter, Orley & Genesove, David, 1992. "Testing for Price Anomalies in Real-Estate Auctions," American Economic Review, American Economic Association, vol. 82(2), pages 501-505, May.
    4. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
    5. Victor Ginsburgh & Pierre-Michel Menger, 1996. "Economics of the arts: selected essays," ULB Institutional Repository 2013/1655, ULB -- Universite Libre de Bruxelles.
    6. Chanel, O. & Gerard-Varet, L.A., 1996. "Auction Theory and Practice Evidence from the Market for Jewellery," G.R.E.Q.A.M. 96b05, Universite Aix-Marseille III.
    7. repec:feb:framed:00135 is not listed on IDEAS
    8. McAfee R. Preston & Vincent Daniel, 1993. "The Declining Price Anomaly," Journal of Economic Theory, Elsevier, vol. 60(1), pages 191-212, June.
    9. Steven T. Buccola, 1982. "Price Trends at Livestock Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(1), pages 63-69.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Olivier Chanel & Stéphanie Vincent, 2004. "Computing price trends in sequential auctions," Recherches économiques de Louvain, De Boeck Université, vol. 70(4), pages 443-460.
    3. Orley Ashenfelter & Kathryn Graddy, 2002. "Art Auctions: A Survey of Empirical Studies," Working Papers 121, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Mezzetti, Claudio, 2008. "Aversion to Price Risk and the Afternoon Effect," The Warwick Economics Research Paper Series (TWERPS) 857, University of Warwick, Department of Economics.
    5. Ginsburgh, V. & van Ours, J.C., 2003. "How to Organize Sequential Auctions : Results of a Natural Experiment by Christie's," Discussion Paper 2003-25, Tilburg University, Center for Economic Research.
    6. Rosato, Antonio, 2014. "Loss Aversion in Sequential Auctions: Endogenous Interdependence, Informational Externalities and the "Afternoon Effect"," MPRA Paper 56824, University Library of Munich, Germany.
    7. Tibor Neugebauer, 2005. "Bidding Strategies Of Sequential First Price Auctions Programmed By Experienced Bidders," Experimental 0503007, University Library of Munich, Germany.
    8. Vishnu V. Narayan & Enguerrand Prebet & Adrian Vetta, 2019. "The Declining Price Anomaly is not Universal in Multi-Buyer Sequential Auctions (but almost is)," Papers 1905.00853, arXiv.org.
    9. Sanna Laksa & Daniel Marszalec, 2020. "Morning-Fresh: Declining Prices and the Right-to-Choose in a Faroese Fish Market," CIRJE F-Series CIRJE-F-1141, CIRJE, Faculty of Economics, University of Tokyo.
    10. Audrey Hu & Liang Zou, 2016. "Sequential Auctions with Generalized Interdependent Values," Tinbergen Institute Discussion Papers 16-016/I, Tinbergen Institute.
    11. Stéphanie Vincent Lyk-Jensen & Olivier Chanel, 2007. "Retailers and consumers in sequential auctions of collectibles," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 278-295, February.
    12. Tibor Neugebauer & Paul Pezanis-Christou, 2003. "Bidding at Sequential First-Price Auctions with(out) Supply Uncertainty: A Laboratory Analysis," UFAE and IAE Working Papers 558.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    13. Audrey Hu & Liang Zou, 2014. "Sequential Auctions, Price Trends, and Risk Preferences," Tinbergen Institute Discussion Papers 14-139/I, Tinbergen Institute.
    14. Yunhan Li & J. Scott Shonkwiler, 2021. "Assessing the Role of Ordering in Sequential English Auctions – Evidence from the Online Western Video Market Auction," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(1), pages 90-105, January.
    15. Dejan Trifunovic, 2014. "Sequential Auctions And Price Anomalies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(200), pages 7-42, January –.
    16. Stuart Kells, 2003. "Explaining The Breadth Of Expert Estimate Ranges In Auctions Of Rare Books," Department of Economics - Working Papers Series 873, The University of Melbourne.
    17. Guerci, E. & Kirman, A. & Moulet, S., 2014. "Learning to bid in sequential Dutch auctions," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 374-393.
    18. Neugebauer, Tibor & Pezanis-Christou, Paul, 2007. "Bidding behavior at sequential first-price auctions with(out) supply uncertainty: A laboratory analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 55-72, May.
    19. Sumit Agarwal & Jing Li & Ernie Teo & Alan Cheong, 2018. "Strategic Sequential Bidding for Government Land Auction Sales – Evidence from Singapore," The Journal of Real Estate Finance and Economics, Springer, vol. 57(4), pages 535-565, November.
    20. Lucio Picci & Antonello Scorcu, 2003. "Bidders' and Sellers' Strategies in Sequential Auctions. New Evidence about the Afternoon Effect," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 163-178, June.

    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:ulb:ulbeco:2013/1701. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/ecsulbe.html .

    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.