Dejan Trifunović * SEQUENTIAL AUCTIONS AND PRICE ANOMALIES

* University of Belgrade, Faculty of Economics, [email protected] JEL CLASSIFICATION: D44 ABSTRACT: In sequential auctions objects are sold one by one in separate auctions. These sequential auctions might be organised as sequential first-price, second-price, or English auctions. We will derive equilibrium bidding strategies for these auctions. Theoretical models suggest that prices in sequential auctions with private values or with randomly assigned heterogeneous objects should have no trend. However, empirical research contradicts this result and prices exhibit a declining or increasing trend, which is called declining and increasing price anomaly. We will present a review of these empirical results, as well as different theoretical explanations for these anomalies.