journal article
Dec 19, 2018
Getting it right or getting it cursed: Auction prices in a residential real estate bubble
Abstract
AbstractThis is the first study to test for a winner's curse in a bubble market. Our hand‐collected sample comprises the sequence of bids and the experience of the winning bidder at Irish residential real estate auctions, prior to the collapse of the bubble. Portfolios of practitioner‐ and hedonic pricing model‐selected self‐similar properties provide benchmark property price estimates. We show neither real estate investors nor owner occupiers shade auction bids to avoid the winner's curse and both raise bids in line with competition. Winning investor bidders pay more for properties, ride the wave of a property bubble, and potentially exacerbate it.
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Metrics
2
Citations
54
References
Details
- Published
- Dec 19, 2018
- Vol/Issue
- 25(5)
- Pages
- 1121-1149
- License
- View
Authors
Funding
Science Foundation Ireland
Award: 16/SPP/3347
Cite This Article
Clare Branigan, Cal Muckley, Paul Ryan (2018). Getting it right or getting it cursed: Auction prices in a residential real estate bubble. European Financial Management, 25(5), 1121-1149. https://doi.org/10.1111/eufm.12200
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