Recurring Auctions with Costly Entry: Theory and Evidence

Shanglyu Deng and Qiyao Zhou

Papers from arXiv.org

Abstract: Recurring auctions are ubiquitous for selling durable assets like artworks and homes, with follow-up auctions held for unsold items. We investigate such auctions theoretically and empirically. Theoretical analysis demonstrates that recurring auctions outperform single-round auctions when buyers face entry costs, enhancing efficiency and revenue due to sorted entry of potential buyers. Optimal reserve price sequences are characterized. Empirical findings from home foreclosure auctions in China reveal significant annual gains in efficiency (3.40 billion USD, 16.60%) and revenue (2.97 billion USD, 15.92%) using recurring auctions compared to single-round auctions. Implementing optimal reserve prices can further improve efficiency (3.35%) and revenue (3.06%).

Date: 2023-06, Revised 2025-02
New Economics Papers: this item is included in nep-des, nep-gth and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2306.17355 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2306.17355

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().