Publication Type

Journal Article

Version

submittedVersion

Publication Date

11-2018

Abstract

This paper studies the extent to which equilibrium auction prices are pushed up sequentially due to strategic bidding behaviors in government land auction sales. Using a unique dataset that covers the universe of tendering prices submitted by all developers for all residential land auction sales in Singapore, we find that a tenderer’s bids are significantly higher where there was a previous land parcel sold within two years and located within four kilometers. The elevated price margin decreases with time and geographic distance. Tracking sequential bids submitted by same developers over time, we find that the incumbent winner of a previous auction often participates in subsequent nearby land sales but does not necessarily win the sites. We argue that the incumbent deliberately bids up the subsequent land prices to gain pricing advantages to their own parcels.

Keywords

Land Sale Auctions, Strategic Sequential Bidding, Land Price, Housing Price, Product Differentiation

Discipline

Asian Studies | Public Economics | Real Estate | Strategic Management Policy

Research Areas

Applied Microeconomics

Publication

Journal of Real Estate Finance and Economics

Volume

57

Issue

4

First Page

535

Last Page

565

ISSN

0895-5638

Identifier

10.1007/s11146-017-9625-0

Publisher

Springer Verlag (Germany)

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1007/s11146-017-9625-0

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