Empirical evidence on the impact of reserve prices in English auctions

Ricardo Gonçalves*

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

7 Citações (Scopus)

Resumo

We study the impact of reserve prices on the revenue of English auctions using a unique hand-collected database of virtual football players from the online football management game Hattrick. As theoretically predicted, setting a reserve price entails a trade-off between the cost of setting it too high and having the good go unsold, and the benefit associated with a higher revenue should the reserve price successfully extract surplus from the highest bidder. Overall, we find the net benefit of setting a higher reserve price to be negative, regardless of the value of the reserve price. This is a novel result insofar as previous literature has generally found an insignificant or positive effect of the reserve price on unconditional auction revenue.
Idioma originalEnglish
Páginas (de-até)202-242
Número de páginas41
RevistaJournal of Industrial Economics
Volume61
Número de emissão1
DOIs
Estado da publicaçãoPublicado - mar 2013

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