First‐Price Sealed‐Bid Tender versus English Open Auction: Evidence from Land Auctions

Chow, Yuen Leng; Ooi, Joseph T. L.

doi:10.1111/1540-6229.12035

Cited by 13 publications

(6 citation statements)

References 44 publications

(79 reference statements)

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“…As a result, allowing bidders to learn about others’ valuations (signals) in an auction can make the bidders more comfortable with their own assessments and may lead them to bid less cautiously (Klemperer ). Using land auction data in Singapore, Chow and Ooi () support the affiliated value theory in common value open auctions. They find that bidders bid aggressively in open auctions by observing other bidders’ information.…”

Section: Animal Spirits and Auctionmentioning

confidence: 86%

“…In our case, we regard

y_{t}

as the auction sales as a percentage of total number of houses sold at time t motivated by auction literature as well as by Gan (), Chow and Ooi () and Dong and Sing () as discussed earlier. However, we also use price‐to‐rent ratio, which gives us an opportunity to compare the results from the two series and to gain more insight into the relevance and relationship of animal spirits to a fundamental‐based price measure in the formation of bubbles in the New Zealand property market.…”

Section: Empirical Estimation Strategymentioning

confidence: 99%

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Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

Shi

Kabir

2017

Real Estate Economics

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Following the animal spirits theory proposed by Akerlof and Shiller, this article contributes to behavior economics by investigating the possibility of using auction sales data to capture evidence of irrational exuberance in the housing market. Using the monthly percentages of residential property auction sales for Auckland, Wellington and Christchurch regions in New Zealand from 2006 to 2015, and the exuberance testing method proposed by Phillips, Shi and Yu, we find that animal spirits have been developing in the Auckland housing market since 2013, but not in other regions. When compared to the results based on price‐to‐rent ratios, auction sales provide more meaningful results for identifying market‐wide irrational exuberance at an early stage. The causality test on price‐to‐rent ratios and auction sales volume shows that asset prices and animal spirits influence each other in the short run. In the long run, prices have significant effect on animal spirits, but not vice versa.

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Section: Animal Spirits and Auctionmentioning

confidence: 86%

“…In our case, we regard

y_{t}

Section: Empirical Estimation Strategymentioning

confidence: 99%

Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

Shi

Kabir

2017

Real Estate Economics

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“…Of the studies that have addressed auctions of non-distressed properties, a large fraction has focused on the preference between auctions versus negotiated sales with respect to sales revenues (Ashenfelter and Genesove, 1992;Lusht, 1996;Quan, 2002;Stevenson et al 2010;Qu and Liu, 2012;Gan, 2013;Haurin et al, 2013;and Chow et al, 2015). Other topics that have been analyzed are comparison between auction methods with respect to revenue maximization (Chow and Ooi, 2014), determinants of sale probability (Ong et al, 2005;Stevenson and Young, 2015), buyer's remorse and the winner's curse (Kim, 1989;Tse et al, Auction strategies 2011) and the role of competition in form of the number of bidders attending the auction (Hungria-Gunnelin, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

An analysis of auction strategies in apartment sales

Hungria‐Gunnelin

2018

JERER

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Purpose This paper aims to empirically test the effect of list price and bidding strategies in ascending auctions of residential real estate. Design/methodology/approach Three regression models are estimated, using a unique data set from 629 condominium apartments in the inner-city of Stockholm, Sweden, sold between January 2010 and December 2011. Findings The results show that jump bidding has the predicted effect of reducing competition by scaring off bidders. However, a higher average bid increment leads to a higher selling price. Furthermore, results show that a fast auction in terms of average time between bids acts to increase the probability of so-called auction fever as both the number of bidders and the selling price are positively correlated with the speed of the auction. While the average behavior of all auction participants, in terms of jump bidding and time between bids, significantly affects auction outcomes, differences in strategies applied by winners and losers show mixed results. The results of this study with respect to sellers’ list price strategy show that underpricing is an ineffective strategy in terms of enticing more bidders to participate in the auction. Furthermore, underpricing is not sufficient to have a positive effect on the selling price. Originality/value This paper is one of the first papers to empirically analyze how different bidding strategies affect the outcome of residential real estate auctions in terms of competition and the final selling price.

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“…Auctions with economic restrictions that fine those bidders that do not take the item are more beneficial than those of first-price sealed-bid [11]. Also, a comparison in an auction of farms concluding that the English auction offers a 4% higher profits for the seller than the first-price sealed-bid [12].…”

Section: Literature Reviewmentioning

confidence: 99%

Auctions in Steel Industry

Ena¹,

Puente²,

Gómez³

et al. 2018

Proceedings of the Third International Conference on Economic and Business Management (FEBM 2018)

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The paper analyzes the literature regarding the auctions of products in the context of the steel sector with three objectives: to identify its determining factors, decide the appropriate method of auctioning in that context and investigate the need to group products in homogeneous lots before the auction. For this, after exposing the current method developed in this type of auction, the following are analyzed: the possible types to be followed, their performance, the main factors of human behavior that may affect them, the factors for the proper design of online auctions and the need to group the products in homogeneous lots to optimize the auction. The consulted literature reveals the suitability of homogeneous groupings prior to the auction and proposes a new model for the on-line auction of iron and steel products.

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First‐Price Sealed‐Bid Tender versus English Open Auction: Evidence from Land Auctions

Cited by 13 publications

References 44 publications

Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

Catch Animal Spirits in Auction: Evidence from New Zealand Property Market

An analysis of auction strategies in apartment sales

Auctions in Steel Industry

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