The Role of the Bidding Process in Price Determination : Jump Bidding in Sequential English Auctions

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Claremont Colleges Working Papers ; No. 2004-11

Classification and Topics

• Classification: Wirtschaft ; Auctions
• Subject: Auction ; Auktionstheorie ; Marktmechanismus

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Raviv, Yaron
• Event: Veröffentlichung
• (who): Claremont McKenna College, Department of Economics
• (where): Claremont, CA
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/23398
• Last update: 10.03.2025, 11:42 AM CET