Adverse Selection in the Market for Slaves in Mauritius, 1825-1835

Canada Research Chair in Risk Management Working Paper No. 06-02

48 Pages Posted: 26 Feb 2006

See all articles by Georges Dionne

Georges Dionne

HEC Montreal - Department of Finance

Pascal St-Amour

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute

Desire Vencatachellum

HEC Montreal

Date Written: February 2006

Abstract

Evidence on adverse selection in slave markets remains inconclusive. We study this question through notarial acts on public slave auctions in Mauritius between 1825 and 1835, involving 4,286 slaves. In addition to slave characteristics, the acts document the identities of buyers and sellers. We use this information to determine whether the buyer of a slave was related (e.g. a relative or a spouse) to the original slave owner, and thus most likely better-informed than other bidders. Auction-theoretic models predict that bidding should be more aggressive when informed bidders are present in open-bids, ascending auctions, such as slave auctions. By proxying informed bidders by related bidders, our results consistently indicate that this is the case, pointing toward presence of residual adverse selection in the market for slaves in Mauritius.

Keywords: Adverse Selection, Information Asymmetry Test, English Auctions, Slavery, Mauritius

JEL Classification: D82, N37

Suggested Citation

Dionne, Georges and St-Amour, Pascal and Vencatachellum, Desire, Adverse Selection in the Market for Slaves in Mauritius, 1825-1835 (February 2006). Canada Research Chair in Risk Management Working Paper No. 06-02. Available at SSRN: https://ssrn.com/abstract=885566 or http://dx.doi.org/10.2139/ssrn.885566

Georges Dionne (Contact Author)

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada
514-340-6596 (Phone)
514-340-5019 (Fax)

HOME PAGE: http://www.hec.ca/gestiondesrisques/

Pascal St-Amour

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Desire Vencatachellum

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada

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