A Structural Empirical Analysis of Dutch Flower Auctions
Gerard J. van den Berg
Bas van der KlaauwJanuary 2008
Abstract
This paper provides a structural empirical analysis of
Dutch auctions of houseplants at the flower auction in Aalsmeer, the
Netherlands. The data set is unique for Dutch auctions in the sense
that it includes observations of all losing bids in an interval
adjacent to the winning bid. The size of this interval is determined
by the speed of reaction of the auction participants.
The data on losing bids are shown to be informative on the
structural model determinants. The models are estimated using the
Gibbs sampler with data augmentation. We take account of data
limitations concerning the number of bidders. The estimation results
are used to investigate whether actual reserve prices are optimal,
and to determine the effects of reserve price changes.
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Last updated: January 28, 2008.