The Declining Price Effect in Sequential Auctions: What Theory Does Not Predict

Olivier Chanel and Stéphanie Vincent Lyk-Jensen ()

No 1999-13, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: This paper studies different explanations given for the "price decline anomaly" in sequential auctions, a phenomenon also known as the "afternoon effect". It surveys the dedicated theoretical models and then explores the influence of the institutional or market characteristics (of the sale) on the price trend. Next , it presents different methods used for measuring price trends and analytically identifies the differences between them. Finally, data from wine auctions are used to show that different methods may lead to opposite trends from the same data and that the number of identical objects being sold influences the price trend.

Keywords: multiple unit auctions; price decline; index Numbers; bootstrap simulations (search for similar items in EconPapers)
JEL-codes: C15 C43 D44 (search for similar items in EconPapers)
Pages: 46 pages
Date: 1999-09
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Citations: View citations in EconPapers (1)

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