Bidding behavior in sequential cattle auctions

This paper studies the institutional characteristics of sequential cattle auctions and their effects on prices. It examines the effects of the order of sale according to quality, secret reserve prices, bidders' multi-unit demands and certain characteristics of the bidders. Theory predicts decli...

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Bibliographic Details
Published in:	International journal of industrial organization 2009, Vol.27 (1), p.33-42
Main Author:	Zulehner, Christine
Format:	Article
Language:	eng
Subjects:	Auctions Bidders Bidding Bids Cattle Economic behaviour Economic theory Multi-unit demand Prices Pricing Private values Secret reserve price Sequential analysis Sequential auctions Sequential auctions Private values Secret reserve price Multi-unit demand Strategic behaviour Studies
Online Access:	Get full text
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Summary:	This paper studies the institutional characteristics of sequential cattle auctions and their effects on prices. It examines the effects of the order of sale according to quality, secret reserve prices, bidders' multi-unit demands and certain characteristics of the bidders. Theory predicts declining prices when sellers are allowed to reject the outcome of the auction, and increasing prices when bidders demand more than one unit. I find evidence that observed declining prices are caused by the order of sale according to quality and the secret reserve prices. I also find that bidders consider the strategic effect of sequential auctions and multi-unit demand.
ISSN:	0167-7187 1873-7986