On the Number of Bidders and Auction Performance: when More Means Less

We first show in the context of sequential multi-unit auctions under complete information that a seller’s revenue may increase or decrease as the number of buyers increases, even when the additional bidders win an object. We use data from the Quebec daily hog auction to empirically analyze the effect of invitations extended to bidders from Ontario. Our estimation accounts for the endogenous timing of these rare invitations, but we nevertheless uncover a negative “invitation” effect. We attribute this anti-competitive effect to the fact that the addition of bidders increases competition in late rounds, but not necessarily in early ones.


Issue Date:
2013-08
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/155951
JEL Codes:
D44; C23
Series Statement:
CREATE Working Paper
2013-4




 Record created 2017-04-01, last modified 2017-08-27

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