How to Set Minimum Acceptable Bids, with an Application to Real Estate Auctions
Posted: 13 Sep 2002
There are 2 versions of this paper
How to Set Minimum Acceptable Bids, with an Application to Real Estate Auctions
Number of pages: 42
Posted: 17 Jul 2002
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Abstract
In a general auction model with affiliated signals, common components to valuations and endogenous entry, we compute the equilibrium bidding strategies and outcomes, and derive a lower bound on the optimal reserve price. This lower bound can be computed using data on past auctions combined with information about the subsequent sales prices of unsold goods. We illustrate how to compute the lower bound using data from real estate auctions.
Keywords: Auctions, Optimal Reserve Price, Real Estate
JEL Classification: D44
Suggested Citation: Suggested Citation
Quan, Daniel C. and McAfee, Randolph Preston and McAfee, Randolph Preston and Vincent, Daniel R., How to Set Minimum Acceptable Bids, with an Application to Real Estate Auctions. Available at SSRN: https://ssrn.com/abstract=314963
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