Equilbrium Price Paths in Sequential Auctions with Stochastic Supply

9 Pages Posted: 3 Mar 1999  

Thomas D. Jeitschko

Michigan State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 1998

Abstract

In many settings where several objects are auctioned sequentially, the total supply is not known with certainity ex ante. In such settings, price formation over the sequence of sales depends critically on the information available to the bidders regarding the remaining supply. For instance, prices may decline due to a reduced "option value" in early auctions caused by uncertain supply. However, if in the course of the auction it becomes known that fewer than expected units will be auctioned, prices may increase due to diminished supply and the corresponding increase in competition in latter auctions.

JEL Classification: D44

Suggested Citation

Jeitschko, Thomas D., Equilbrium Price Paths in Sequential Auctions with Stochastic Supply (September 1998). Available at SSRN: https://ssrn.com/abstract=149309 or http://dx.doi.org/10.2139/ssrn.149309

Thomas D. Jeitschko (Contact Author)

Michigan State University - Department of Economics ( email )

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East Lansing, MI 48824
United States
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HOME PAGE: http://www.msu.edu/~jeitschk/

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