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Claremont Colleges Working Papers in Economics, Department of Economics, Claremont McKenna College >
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http://hdl.handle.net/10419/23398
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| Title: | | The Role of the Bidding Process in Price Determination : Jump Bidding in Sequential English Auctions  |
| Authors: | | Raviv, Yaron |
| Issue Date: | | 2004 |
| Series/Report no.: | | Working paper series / Claremont McKenna College 04,11 |
| Abstract: | | I study the sequence of bidding in an open-outcry English auction to examine how the strategic bidding process affects price determination. I do this by studying the anomalous nature of ?jump bidding? in data I have collected from a series of public auctions of used cars in New Jersey. Jump bidding occur when a new offer is submitted that is above the old offer plus the minimum bid increment permitted. I find that jump biddings are an empirical regularity in all items sold. The jumps are a function of the presale estimate of the item?s price but are not affected by the selling order. I suggest a way to use the Jump Biddings to determine whether an open-outcry auction is best interpreted with models that assume private-or common-item valuations, and conclude that these auctions are consistent with the common values interpretation. |
| Subjects: | | Auction |
| JEL: | | D44 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Claremont Colleges Working Papers in Economics, Department of Economics, Claremont McKenna College
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| 2004-11.pdf | | 236.49 kB | Adobe PDF |
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