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How to organize a sequential auction: results of a natural experiment by Christie's

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  • Victor Ginsburgh
  • Jan van Ours

Abstract

In empirical studies of sequential auctions of identical objects prices have been found to decline.We study auctions of ancient Chinese porcelain recovered from shipwrecks.In these auctions there are very long sequences of lots of identical objects.We find that the average price decline is smaller in long sequences.It is especially large for the first pair of lots auctioned; it is also larger when the price of the previous lot was larger than (the upper bound of the range of) the pre-sale estimate of the previous lot and when the number of items in lots that follow each other increases.As a consequence, it appears that sellers may have some control over the sequence of prices and therefore on their revenue.Our results point to the fact that a sequence of lots each of which contains the same number of items generates more revenue than lots with varying number of items.
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Suggested Citation

  • Victor Ginsburgh & Jan van Ours, 2007. "How to organize a sequential auction: results of a natural experiment by Christie's," ULB Institutional Repository 2013/5255, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/5255
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Raphaële Préget & Patrick Waelbroeck, 2006. "Un modèle d'estimation de la valeur des lots de bois à partir de résultats d'enchères avec invendus," Revue économique, Presses de Sciences-Po, vol. 57(3), pages 593-603.
    3. Dakshina Garfield De Silva & Marina Gertsberg & Georgia Kosmopoulou & Rachel Pownall, 2017. "Dealer Networks in the World of Art," Working Papers 198144199, Lancaster University Management School, Economics Department.
    4. Nauro F. Campos & Renata Leite Barbosa, 2009. "Paintings and numbers: an econometric investigation of sales rates, prices, and returns in Latin American art auctions," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 28-51, January.
    5. Johannes Horner & Julian Jamison, 2006. "Private Information in Sequential Common-Value Auctions," Discussion Papers 1422, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. Paulo B. Goes & Gilbert G. Karuga & Arvind K. Tripathi, 2010. "Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions," Information Systems Research, INFORMS, vol. 21(4), pages 907-924, December.
    7. Sofia Izquierdo Sanchez & Maria Navarro Paniagua, 2017. "Hollywood’s Wage Structure and Discrimination," Working Papers 152465718, Lancaster University Management School, Economics Department.

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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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