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Bidding behavior in sequential cattle auctions

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  • Zulehner, Christine

Abstract

This paper studies the institutional characteristics of sequential cattle auctions and their effects on prices. It examines the effects of the order of sale according to quality, secret reserve prices, bidders' multi-unit demands and certain characteristics of the bidders. Theory predicts declining prices when sellers are allowed to reject the outcome of the auction, and increasing prices when bidders demand more than one unit. I find evidence that observed declining prices are caused by the order of sale according to quality and the secret reserve prices. I also find that bidders consider the strategic effect of sequential auctions and multi-unit demand.

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  • Zulehner, Christine, 2009. "Bidding behavior in sequential cattle auctions," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 33-42, January.
    • Handle: RePEc:eee:indorg:v:27:y:2009:i:1:p:33-42
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    1. Harrison Hong & Ilan Kremer & Jeffrey D. Kubik & Jianping Mei & Michael Moses, 2015. "Ordering, revenue and anchoring in art auctions," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 186-216, March.
    2. Javier D. Donna & José†Antonio Espín†Sánchez, 2018. "Complements and substitutes in sequential auctions: the case of water auctions," RAND Journal of Economics, RAND Corporation, vol. 49(1), pages 87-127, March.
    3. Boudreau, James W. & Shunda, Nicholas, 2016. "Sequential auctions with budget constraints: Evidence from fantasy basketball auction drafts," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 62(C), pages 8-22.
    4. Edmund Mantell, 2013. "Rational Reserve Pricing in Sequential Auctions," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 41(2), pages 149-159, June.
    5. Foster, Joshua, 2022. "Semi-nonparametric estimation of secret reserve prices in auctions," Economics Letters, Elsevier, vol. 220(C).

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