Competing art auctions

Abstract

This paper examines the optimal choices of two competing auction houses, where each one is able to choose its own auction date so that the auctions run either simultaneously, sequentially, or with an overlap. We show that simultaneously running auctions, per se, is an optimal choice for each house. However, if we fix the supply of objects for sale, then the effects of this simultaneity disappear, and the houses choose arbitrary dates. If the sellers’ supply of objects to the auction house is taken into account, then overlapping auctions will be the equilibrium outcome and the optimising behaviour of the auction houses.