IDEAS home Printed from https://ideas.repec.org/a/rre/publsh/v43y2013i1p81-96.html
   My bibliography  Save this article

The Responsiveness of Tax Lien Investors in English Auctions to Matching Rules: Evidence from Illinois

Author

Listed:
  • Joshua J. Miller

    (University of Illinois at Chicago)

  • Silda Nikaj

    (Texas Christian University)

Abstract

Auctions allowing competitors to match the current high bid are thought to be suboptimal, particularly compared to auctions where new bids must exceed the current high bid (Milgrom, 2004). To date no study has examined, empirically, the effect of allowing matching bids. A recent policy innovation in Illinois provides an opportunity to estimate the effect of matching on winning bids. Using administrative data from five suburban Illinois counties on the auction of 127,073 liens, we find that an English auction design that allows matching is associated with higher winning bids when compared to an English design that does not allow matching. These higher winning bids increase interest fees on tax delinquent property owners by 20 percent. The paper is the first to estimate the cost of matching on auction outcomes.

Suggested Citation

  • Joshua J. Miller & Silda Nikaj, 2013. "The Responsiveness of Tax Lien Investors in English Auctions to Matching Rules: Evidence from Illinois," The Review of Regional Studies, Southern Regional Science Association, vol. 43(1), pages 81-96, Summer.
    • Handle: RePEc:rre:publsh:v:43:y:2013:i:1:p:81-96
    as

    Download full text from publisher

    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/43.1.4/pdf
    File Function: To View On Journal Page
    Download Restriction: no
    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/download/43.1.4/pdf
    File Function: To Download Article
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ashenfelter, Orley, 1989. "How Auctions Work for Wine and Art," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 23-36, Summer.
    2. Larry DeBoer & James Conrad & Kevin T. McNamara, 1992. "Property Tax Auction Sales," Land Economics, University of Wisconsin Press, vol. 68(1), pages 72-82.
    3. Menezes, Flavio M., 2008. "An Introduction to Auction Theory," OUP Catalogue, Oxford University Press, number 9780199275991.
    4. Ashenfelter, Orley & Genesove, David, 1992. "Testing for Price Anomalies in Real-Estate Auctions," American Economic Review, American Economic Association, vol. 82(2), pages 501-505, May.
    5. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721.
    6. Luc Anselin & Daniel Arribas-Bel, 2013. "Spatial fixed effects and spatial dependence in a single cross-section," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 3-17, March.
    7. Dye, Richard F. & McGuire, Therese J., 1997. "The effect of property tax limitation measures on local government fiscal behavior," Journal of Public Economics, Elsevier, vol. 66(3), pages 469-487, December.
    8. Anselin, Luc, 2002. "Under the hood : Issues in the specification and interpretation of spatial regression models," Agricultural Economics, Blackwell, vol. 27(3), pages 247-267, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alm, James & Hawley, Zackary & Lee, Jin Man & Miller, Joshua J., 2016. "Property tax delinquency and its spillover effects on nearby properties," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 71-77.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    2. Seow Eng Ong, 2006. "Price Discovery in Real Estate Auctions: The Story of Unsuccessful Attempts," Journal of Real Estate Research, American Real Estate Society, vol. 28(1), pages 39-60.
    3. Audrey Hu & Liang Zou, 2014. "Sequential Auctions, Price Trends, and Risk Preferences," Tinbergen Institute Discussion Papers 14-139/I, Tinbergen Institute.
    4. Dejan Trifunovic, 2014. "Sequential Auctions And Price Anomalies," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(200), pages 7-42, January –.
    5. Stevenson, Simon & Young, James & Gurdgiev, Constantin, 2010. "A comparison of the appraisal process for auction and private treaty residential sales," Journal of Housing Economics, Elsevier, vol. 19(2), pages 145-154, June.
    6. Mezzetti, Claudio, 2008. "Aversion to Price Risk and the Afternoon Effect," Economic Research Papers 269855, University of Warwick - Department of Economics.
    7. Mark G. Dotzour & Everard Moorhead & Daniel T. Winkler, 1998. "The Impact of Auctions on Residential Sales Prices in New Zealand," Journal of Real Estate Research, American Real Estate Society, vol. 16(1), pages 57-72.
    8. Audrey Hu & Liang Zou, 2016. "Sequential Auctions with Generalized Interdependent Values," Tinbergen Institute Discussion Papers 16-016/I, Tinbergen Institute.
    9. Yuen Leng Chow & Isa E. Hafalir & Abdullah Yavas, 2015. "Auction versus Negotiated Sale: Evidence from Real Estate Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(2), pages 432-470, June.
    10. Philippe Février & William Roos & Michael Visser, 2005. "The Buyer's Option in Multi‐Unit Ascending Auctions: The Case of Wine Auctions at Drouot," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(4), pages 813-847, December.
    11. Olivier Chanel & Stéphanie Vincent, 2004. "Computing price trends in sequential auctions," Recherches économiques de Louvain, De Boeck Université, vol. 70(4), pages 443-460.
    12. Stephanie Rosenkranz & Patrick W. Schmitz, 2007. "Reserve Prices in Auctions as Reference Points," Economic Journal, Royal Economic Society, vol. 117(520), pages 637-653, April.
    13. Lamy, Laurent & Patnam, Manasa & Visser, Michael, 2016. "Correcting for Sample Selection From Competitive Bidding, with an Application to Estimating the Effect of Wages on Performance," CEPR Discussion Papers 11376, C.E.P.R. Discussion Papers.
    14. Leufkens Kasper & Peeters Ronald & Vorsatz Marc, 2012. "An Experimental Comparison of Sequential First- and Second-Price Auctions with Synergies," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-28, January.
    15. Orley Ashenfelter & Kathryn Graddy, 2002. "Art Auctions: A Survey of Empirical Studies," Working Papers 121, Princeton University, Department of Economics, Center for Economic Policy Studies..
    16. Nicola Dimitri, 2021. "The “Italian Football Federation Auction” for Co-ownership Resolution," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 58(2), pages 275-285, March.
    17. Andersson , Ola & Andersson , Tommy, 2015. "Decomposing the Afternoon Effect: An Empirical Investigation of Sequential Train Ticket Auctions," Working Papers 2015:28, Lund University, Department of Economics.
    18. Leufkens, K. & Peeters, R.J.A.P. & Vorsatz, M., 2006. "Sequential auctions with synergies: an experimental analysis," Research Memorandum 040, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    19. Sunak, Yasin & Madlener, Reinhard, 2016. "The impact of wind farm visibility on property values: A spatial difference-in-differences analysis," Energy Economics, Elsevier, vol. 55(C), pages 79-91.
    20. Jeremy Bulow & Paul Klemperer, 2007. "When are Auctions Best?," Economics Papers 2007-W03, Economics Group, Nuffield College, University of Oxford.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rre:publsh:v:43:y:2013:i:1:p:81-96. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tammy Leonard & Lei Zhang (email available below). General contact details of provider: http://www.srsa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.