Auction price anomalies: Evidence from wool auctions in Australia
Journal name
Economic Record
Publication date
2004
Sub-type
Article
Volume number
80
Issue number
250
ISSN
0013-0249
Start page
271
End page
288
Total pages
18
Place of publication
Burwood Victoria
Publisher
Economic Soc of Australia Brown Prior Anderson Pty Ltd
Abstract
Using detailed Australian wool auction data we test for further evidence of pricing anomalies at sequential auctions. We find that an anomaly frequently exists and order is frequently endogenously determined. Moreover, prices increase through some sales and decrease through others. We examine whether it is possible to explain the variation in the anomaly across sales and conclude that there is no systematic relationship between the direction of the price anomaly and the characteristics of the wool or the auction. We do, however, find evidence that an anomaly, is more likely in longer sales.