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Auctions with different rates of patience: Evidence from the resale shoe market
Author(s) -
Watts Alison
Publication year - 2019
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.3056
Subject(s) - patience , ask price , common value auction , proxy bid , set (abstract data type) , microeconomics , vickrey auction , english auction , dutch auction , business , economics , revenue equivalence , auction theory , computer science , psychology , social psychology , finance , programming language
Bids and asks are examined over time using auction data from a continuous auction of authentic deadstock sneakers. A theoretical analysis of a double auction over time shows that if buyers and sellers have different rates of patience, then a buyer (respectively, seller) who is patient will be more likely to set a lower initial bid (respectively, higher initial ask). This causes an increase in the unfulfilled bid–ask spread over time. These results are tested using data collected from the StockX website for two specific deadstock sneakers. Results show that the unfulfilled bid–ask spread is positively correlated with time.