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Optimal Ordering in Sequential English Auctions: A Revenue-Comparison Model for 18th Century Art Auctions in London and Paris

By Amaan Mitha

We develop a model based on several auction parameters to test the widely held notion that in a sequential English auction, it is optimal for the seller to arrange the lots in order of decreasing value. We test this model against two datasets of 18th century auctions, one of various auctions from Paris and the other from Christie’s sales in London. We find that the Paris data support the claim, while the Christie’s data seem to refute the optimal strategy. We also find a rationale for bidders in the Christie’s auctions to alter their strategies, accounting for the discrepancy.

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Advisor: Neil De Marchi | JEL Codes: D4, Z11 | Tagged: Auctions, English Auction, Lot Ordering, Optimal Auction Strategy, Sequential Auctions

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