ON THE NUMBER OF BIDDERS AND AUCTION PERFORMANCE: WHEN MORE MEANS LESS

Bruno Larue, Mohamed Jeddy and Sebastien Pouliot ()

No 156465, Working Papers from Structure and Performance of Agriculture and Agri-products Industry (SPAA)

Abstract: Dans un contexte d’enchères séquentielles multi-unitaires, en information complète, on montre que le revenu du vendeur peut augmenter ou diminuer lorsque le nombre d’enchérisseurs augmente, et ce même si un des nouveaux enchérisseurs gagne un des objets. Nous avons recours à des données de l’enchère électronique du porc pour analyser empiriquement l’incidence d’enchérisseurs additionnel sur le prix moyen. Notre méthode d’estimation tient compte de l’endogénéité des invitations lancées à des abattoirs à l’extérieur du Québec. Nous avons identifié un effet négatif que nous expliquons par le fait que l’ajout d’enchérisseurs augmente la concurrence sur les derniers lots mis en vente, mais pas nécessairement sur les premiers......We first show in the context of sequential multi-unit auctions under complete information that a seller’s revenue may increase or decrease as the number of buyers increases, even when the additional bidders win an object. We use data from the Quebec daily hog auction to empirically analyze the effect of invitations extended to bidders from Ontario. Our estimation accounts for the endogenous timing of these rare invitations, but we nevertheless uncover a negative “invitation” effect. We attribute this anti-competitive effect to the fact that the addition of bidders increases competition in late rounds, but not necessarily in early ones.

Keywords: Institutional and Behavioral Economics; Livestock Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 40
Date: 2013-09
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https://ageconsearch.umn.edu/record/156465/files/B ... onPerformance_WP.pdf (application/pdf)

Related works:
Working Paper: On the Number of Bidders and Auction Performance: when More Means Less (2013)
Working Paper: On the Number of Bidders and Auction Performance: when More Means Less (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:spaawp:156465

DOI: 10.22004/ag.econ.156465

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