Random drawing in sequential auctions: investigating the role of a market device in timber sales

El Hadi Caoui () and Gérard Marty ()
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El Hadi Caoui: University of Toronto
Gérard Marty: INRAE - AgroParisTech

Review of Agricultural, Food and Environmental Studies, 2023, vol. 104, issue 2, No 1, 122 pages

Abstract: Abstract The Office National des Forêts (ONF) in France uses sequential auctions to sell a significant portion of timber from public forests. This mechanism, based on a competitive dynamic between buyers, relies on randomization at two key moments: at the start of the sale, to determine the order in which timber lots are auctioned, and at the end, to break ties between bidders who submit identical offers. This article explains why, from the sociological perspective of markets, this informal institution, which was introduced at the request of municipalities and some buyers to ensure equal treatment, is not legitimized by the ONF. It examines whether participants’ perceptions are consistent with patterns of auction prices through an empirical analysis of bid data from these sales. The article also investigates the reasons why the ONF has been randomly selecting winners in cases of tied bids for over two centuries and, more recently, with the digitalization of sales, has opted for a new market device based on the order in which offers were submitted.

Keywords: Timber auctions; Institutions; Market devices; Market organization; Random drawing; Economic sociology (search for similar items in EconPapers)
JEL-codes: D44 L73 Z1 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s41130-022-00184-0

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