Auction structure and court-ordered real estate sale outcomes: evidence from co-ownership dissolution cases in Turkey

Ceyhun Elgin ()
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Ceyhun Elgin: Bogazici University

European Journal of Law and Economics, 2025, vol. 60, issue 1, No 3, 55-80

Abstract: Abstract This study examines the effects of a significant legal change in Turkey’s real estate auction system on co-ownership dissolution outcomes. In 2013, Turkey shifted from a two-step auction process—with sequential starting prices set at 60% and 40% of a property’s appraised value—to a single-auction model with a starting price at 50%. Using a regression discontinuity design, this paper analyzes the effect of this shift on final sale prices, time to sale, and overall market efficiency in co-ownership dissolution cases. Findings indicate that the new single-auction model has led to significantly higher final sale prices and reduced time to sale, suggesting increased market efficiency. Additionally, results show that the policy change attracted more bidders and fostered a more competitive bidding environment, especially benefiting cases with multiple co-owners and lower-valued properties. This research provides empirical insights into the broader economic and legal implications of auction design in real estate markets and offers valuable guidance for policymakers considering similar reforms in other jurisdictions.

Keywords: Auction design; Real estate economics; Co-ownership; Regression discontinuity; Market efficiency; Property law (search for similar items in EconPapers)
JEL-codes: C21 D44 K11 R31 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10657-025-09847-x

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