New Evidence on Price Anomalies in Sequential Auctions: Used Cars in New Jersey

摘要

This article examines the sequence of winning bids in the public auction of used cars in New Jersey for the presence of price anomalies. Unlike many studies of heterogeneous objects, where the effect of the order of sale on the price may not be credibly identified, here the effect of the order is identified, because the items are randomly selected for sale. In a further contrast to many other studies, these data indicate that the prices tend to increase as the auction proceeds. The data also indicate that once several items have been sold, there is no change in the bidding behavior or any further increase in prices.