The declining price anomaly
Article Abstract:
Data from wine auctions is used to confirm the existence of the declining price anomaly, which indicates that identical products sold sequentially at auction typically follow a decreasing pattern of prices even though the identical products may be sold only minutes apart. The anomaly is known by wine traders as the 'afternoon effect'. The authors analyze the independent, private values model as well as the effects of decreasing and nondecreasing absolute risk aversion on the path of prices in first-price and second-price wine auctions.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1993
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Updating the reserve price in common-value auctions
Article Abstract:
The common-value auction model was generalized so that the number of bidders was determined endogenously and so that a whimsical factor, such as nature, could be incorporated. The generalized mineral-rights model was modified to provide for stochastic endogenous participation. An assessment of the data on offshore oil leases indicated that the government's reserve price was too low. This model could be extended to calculate the optimal reserve price.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1992
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Multiproduct equilibrium price dispersion
Article Abstract:
The economic phenomenon of multiproduct price dispersion occurs as a result of the exercise by consumers of their right to choose to buy specific commodities at the lowest prices and the effect of such behavior on competing sellers. In this case, there is no unique supply-demand equilibrium. Instead, there may be two sets of equilibria with the first determined by profits and the other by price.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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