Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-23T10:26:41.969Z Has data issue: false hasContentIssue false

Computing price trends in sequential auctions*

Published online by Cambridge University Press:  17 August 2016

Olivier Chanel
Affiliation:
GREQAM-IDEP, Centre National de la Recherche Scientifique
Stéphanie Vincent
Affiliation:
Danish Transport Research Institute
Get access

Summary

This paper compares various methods used for measuring price trends in sequential auctions and draws on index number theory. Data from wine auctions are used to show that different methods applied to the same data may lead to significantly different conclusions. Moreover the same method can even lead to opposite results depending on the way pairs are selected within the set of similar objects sold sequentially. Finally, the number of identical objects being sold also influences the price trend.

Résumé

Résumé

Cet article compare les différentes méthodes utilisées pour mesurer les tendances de prix dans les enchères séquentielles, en s'appuyant sur la théorie des indices. Des données sur les enchères de vin sont utilisées pour montrer que différentes méthodes appliquées aux mêmes données peuvent conduire à des conclusions significativement différentes. De plus, la même méthode peut conduire à des résultats opposés en fonction du critère de sélection des paires des biens similaires vendus successivement. Enfin, le nombre d'objets identiques vendus influence la tendance des prix.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2004 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

**

Corresponding author: CNRS-GREQAM-IDEP, 2 rue de la CharitĖ, F-13002 Marseilles, France, e-mail: [email protected].

***

Danish Transport Research Institute, Knuth-Winterfeldts AIIÉ, Bygning 116 Vest, DK-2800 Kgs Lyngby, Denmark, e-mail: [email protected].

*

The authors are very grateful to Victor Ginsburgh, Alan Kirman, Michel Lubrano, Peter Lyk-Jensen, Stephen Martin, Costin Protopopescu and two anonymous referees for their helpful comments and suggestions. The usual caveat applies.

References

Ashenfelter, O. (1989), “How auctions work for wine and art”, Journal of Economic Perspectives, 3, pp. 2336.Google Scholar
Ashenfelter, O. and Genesove, D. (1992), “Testing for price anomalies in real-estate auctions”, American Economic Review, 82, pp. 501505.Google Scholar
Beggs, A. and Graddy, K. (1997), “Declining values and the afternoon effect : Evidence from art auctions”, RAND Journal of Economics, 28, pp. 544565.Google Scholar
Bickel, P.J. and Freedman, D.A. (1981), “Some asymptotic theory for the bootstrap”, Annals of Statistics, 9, pp. 11961217.Google Scholar
Boskin, M. (1996), “Towards a more accurate measure of the cost of living”, Report to the Senate finance committee by the Advisory Commission to study the consumer price index, Dec. 5.Google Scholar
Buccola, S. (1982), “Price trends at livestock auctions”, American Journal of Agricultural Economics, 64, pp. 6369.Google Scholar
Chanel, O., Gérard-Varet, L-A. and Vincent, S. (1996), “Auction theory and practice : Evidence from the market of jewellery”, in Ginsburgh, V. and Menger, P.-M. (eds.), Economics of the arts : Selected essays, Amsterdam, North Holland, pp. 135149.Google Scholar
Daniel, W. (1990), Applied nonparametric statistics, Second edition, Boston, PWS-Kent.Google Scholar
Di Vittorio, A. and Ginsburgh, V. (1994), “Pricing red wines of Médoc vintages from 1949 to 1989 at Christie’s auctions”, Mimeo, University Libre de Bruxelles, Bruxelles.Google Scholar
Diewert, W.E. (1987), “Index numbers”, in Eatwell, J. Milgate, M. and Newman, P. (eds.), The new Palgrave : A dictionary of economics, London, The Macmillian Press, pp. 767780.Google Scholar
Diewert, W.E. (1998), “Index number issues in the consumer price index”, Journal of Economic Perspectives, 12, pp. 4758.Google Scholar
Efron, B. and Tibshirani, R.J. (1993), “An introduction to the bootstrap”, Monographs on statistics and applied probability, 57, New York and London, Chapman and Hall.Google Scholar
Fevrier, P. (2003), “Enchères multi-unités : une approche théorique, empirique et expérimentale”, unpublished PhD Dissertation, École des Hautes Études en Sciences Sociales, Paris.Google Scholar
Ginsburgh, V. (1998), “Absentee bidders and the declining price anomaly in wine auctions”, Journal of Political Economy, 106, pp. 13021319.Google Scholar
Lusht, K. (1994), “Order and price in a sequential auction”, Journal of Real Finance and Economics, 8, pp. 259266.Google Scholar
McAfee, R.P. and Vincent, D. (1993), “The declining price anomaly”, Journal of Economic Theory, 60, pp. 191212.Google Scholar
Milgrom, P. and Weber, R.J. (2000), “A theory of auctions and competitive bidding II”, in Klemperer, P. (ed.), The economic theory of auctions, Cheltenham, Edward Elgar.Google Scholar
Pesando, J.E. and Shum, P.M. (1996), “Price anomalies at auction : Evidence from the market for modern prints”, in Ginsburgh, V. and Menger, P.-M. (eds.), Economics of the arts : Selected essays, Amsterdam, North Holland, pp. 113134.Google Scholar
Pezanis-Christou, P. (1997), “Three essays on competitive bidding”, unpublished PhD Dissertation, European University Institute, Florence.Google Scholar
Reinsdorf, M.B. (1998), “Formula bias and within-stratum substitution bias in the U.S. CPI”, The Review of Economics and Statistics, 80, pp. 175187.Google Scholar
Taylor, W.M. (1991), “Declining prices in sequential auctions : An empirical investigation”, Working Paper, n°90, Rice University, Houston.Google Scholar
Van Den Berg, G.J., Van Ours, J.C. and Pradhan, M.P. (2001), “The declining price anomaly in Dutch Dutch rose auctions”, American Economic Review, 91:4, pp. 10551062.Google Scholar
Weber, R.J. (1983), “Multiple-object-auctions”, in Engelbrecht-Wiggans, R. Shubik, M. and Stark, R.M. (eds.), Auctions, bidding, and contracting : Uses and theory, New York, New York University Press.Google Scholar