Bidding behaviour in second-price auctions: rare stamp sales, 1923–1937

Abstract

We find significant asymmetries between bid functions of the low and high mail bidders in auctions of rare stamps over the extremes of the business cycle 1923–1937. We also find a strong negative relationship between the number of bidders and the bids, suggesting that the common-value characteristics of stamps outweigh their private-value characteristics. Finally, we show that stamp returns are positively related to inflation and to stock yields, and negatively to interest rates. These last results correspond to other studies of stamps over more stable sample periods.