How to Organize Sequential Auctions: Results of a Natural Experiment by Christie's

CentER Discussion Paper No. 2003-25

27 Pages Posted: 1 Jul 2004

See all articles by Victor A. Ginsburgh

Victor A. Ginsburgh

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE); Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Jan C. van Ours

Tilburg University - Department of Economics; University of Melbourne - Department of Economics

Date Written: March 2003

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.

Keywords: Sequential auctions, declining prices

JEL Classification: D44

Suggested Citation

Ginsburgh, Victor A. and van Ours, Jan C., How to Organize Sequential Auctions: Results of a Natural Experiment by Christie's (March 2003). CentER Discussion Paper No. 2003-25. Available at SSRN: https://ssrn.com/abstract=550224 or http://dx.doi.org/10.2139/ssrn.550224

Victor A. Ginsburgh (Contact Author)

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
1348 Louvain-la-Neuve, 1348
Belgium
+32 2 650 3846 (Phone)
+32 2 650 4012 (Fax)

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
+32 2 650 3839/4 (Phone)
+32 2 650 3595 (Fax)

Jan C. Van Ours

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2880 (Phone)
+31 13 466 3042 (Fax)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

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