AUCTION ORDER OF SALE AND THE PROBABILITY OF SALE

Abstract

This paper provides a fresh insight to the studies on the “afternoon effect” in sequential auctions, with a special focus on real property auctions and their outcomes. Using a comprehensive data-set consisting of residential, commercial and industrial auction properties from 2005 to 2009, it is shown that the probability of a successful sale declines along with the order of sale. Evidence was also found that different property types have varying probability of success in an auction of heterogeneous items. Distress sales, auction house, and the timing of sale are also variables shown to have a significant effect on the probability of sale. However, the impact of the order of sale of sale on sale price is found to be statistically insignificant, indicating that the price-decline anomaly is not evident in the heterogeneous real estate auction market in Singapore.