Research

Abstract: In the presence of inventory availability information and a declining price path, buyers face a dynamic trade-off: strategically delaying their purchase to secure a lower price versus acting immediately to avoid a stockout. We examine this tension within the context of the multi-unit descending (Dutch) auction, utilizing data from the flower wholesale market. We document empirical evidence of both strategic delay under abundant inventory and scarcity-driven herding once prior purchases deplete the stock. To quantify these dynamics, we develop and estimate a structural model of buyer valuations and dynamic decision-making. Our counterfactual simulations reveal that while the sequential Dutch auction yields slightly lower expected revenue than efficient alternative auction formats, it compensates by providing superior revenue stability and faster sales velocity. Furthermore, it generates significantly higher revenue and substantially lower waste rates than the posted-price mechanism, even if sellers can observe the majority of buyers' valuations. Ultimately, we demonstrate that the sequential Dutch auction serves as an optimal mechanism for risk-averse sellers processing multi-unit perishable goods within a strict timeline.

Abstract: This paper documents the impact of a simple and universally applicable auction innovation: moving online. We leverage bid-level data from an offline-to-online transition of state mineral lease auctions, the features of which facilitate a detailed study. Controlling for auction heterogeneity, we find a large revenue difference in favor of online auctions, explained by a large increase in the number of bidders. Examining bidders' identities reveals an inflow of new participants who had not participated before the transition. We do not detect different post-auction outcomes between new and existing participants. Where not yet adopted, online auctions are well worth consideration.

Abstract: This study quantifies how contract duration influences buyers' willingness-to-pay (WTP) when they hold real options that allow them to flexibly time consumption in response to changing market conditions. Using contract data from the US timber industry, we show that buyers delay consumption to manage payoff risk. This behavior generates heterogeneous WTP across buyers. We use structural estimation to uncover the key parameters underlying the incentive to delay consumption. Using these estimates, we conduct counterfactual simulations to measure how longer contract durations shift WTP and to clarify the boundary conditions linked to project size, buyer composition, and market trends. The counterfactual simulations reveal that extending contract duration from 3 to 4 years raises seller revenue by 9-13%, with effects amplified for larger projects and high-type buyers during the upward market trend.