Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental examination

This paper reports on a large-scale field experiment testing strategies available to a seller participating in simultaneous competitive sequential ascending price automobile auctions. Every other week, the seller offered approximately 100 vehicles for sale in an auction environment in which several...

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Bibliographic Details
Published in:Journal of economic behavior & organization 2009-08, Vol.71 (2), p.75-88
Main Authors: Grether, David M., Plott, Charles R.
Format: Article
Language:English
Subjects:
Auctions
Auctions Used automobile Orders Multiple goods
Automobiles
Competitiveness
Economic theory
Experiments
Motor cars
Multiple goods
Orders
Prices
Pricing
Sales
Sequences
Sequential analysis
Strategic behaviour
Studies
Used automobile
Vehicles
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Summary:This paper reports on a large-scale field experiment testing strategies available to a seller participating in simultaneous competitive sequential ascending price automobile auctions. Every other week, the seller offered approximately 100 vehicles for sale in an auction environment in which several competing sellers offered on the order of 3000 vehicles. The experiment tested various sequences in which the seller could offer the vehicles, such as high values first or low values first. Surprisingly, and contrary to intuition drawn from the theory of single item and single seller auctions, the worst performing sequence from those tested is for the seller to order vehicles from highest to lowest values. The best sequence is to group the vehicles by type and offer the low valued vehicles first and then move to offer the higher valued vehicles.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2009.02.018