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Bidding, Auctions, and House Purchase

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  • K Gibb

    (Centre for Housing Research, University of Glasgow, 25 Bute Gardens, Glasgow G12 8RS, Scotland)

Abstract

In this paper, the economics of house purchase are examined, in particular in relation to bidding in housing auctions. A small postal survey of recent movers in the City of Glasgow is analysed to indicate the factors associated with economic rent accruing to the seller. Although there are important a priori links between auction theory and house purchase through informational asymmetries which could yield testable propositions, there are fundamental areas of difficulty. Auction analysis is essentially static whereas house purchase is primarily a process wherein market makers have a pivotal role. Nonetheless the need for further research into housing auctions and purchase behaviour is identified and supported. In particular, further research of a more qualitative and experimental methodology is strongly urged. This should be the first step in the integration of housing economics with a more microeconomic study of process and outcome at the point of house purchase.

Suggested Citation

  • K Gibb, 1992. "Bidding, Auctions, and House Purchase," Environment and Planning A, , vol. 24(6), pages 853-869, June.
    • Handle: RePEc:sae:envira:v:24:y:1992:i:6:p:853-869
    DOI: 10.1068/a240853
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    References listed on IDEAS

    as
    1. Bulow, Jeremy & Roberts, John, 1989. "The Simple Economics of Optimal Auctions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1060-1090, October.
    2. Eggertsson,Thrainn, 1990. "Economic Behavior and Institutions," Cambridge Books, Cambridge University Press, number 9780521348911, September.
    3. Smith, Lawrence B & Rosen, Kenneth T & Fallis, George, 1988. "Recent Developments in Economic Models of Housing Markets," Journal of Economic Literature, American Economic Association, vol. 26(1), pages 29-64, March.
    4. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
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    Cited by:

    1. Eric J. Levin & Gwilym B. J. Pryce, 2007. "A Statistical Explanation for Extreme Bids in the House Market," Urban Studies, Urban Studies Journal Limited, vol. 44(12), pages 2339-2355, November.
    2. Gwilym Pryce, 2011. "Bidding Conventions and the Degree of Overpricing in the Market for Houses," Urban Studies, Urban Studies Journal Limited, vol. 48(4), pages 765-791, March.
    3. Nan Liu, 2021. "Market buoyancy, information transparency and pricing strategy in the Scottish housing market," Urban Studies, Urban Studies Journal Limited, vol. 58(16), pages 3388-3406, December.

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