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

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Listed:
  • Bruno Larue
  • Mohamed Jeddy
  • Sébastien Pouliot

Abstract

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.

Suggested Citation

  • Bruno Larue & Mohamed Jeddy & Sébastien Pouliot, 2013. "On the Number of Bidders and Auction Performance: when More Means Less," Cahiers de recherche CREATE 2013-4, CREATE.
    • Handle: RePEc:lvl:creacr:2013-4
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Auctions; Livestock; Competition; Price;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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