Real estate auctions: A survey of theory and practice

Recent downturns in real estate markets combined with a general acceptance of auctions have resulted in an unprecedented number of auction sales. A need therefore exists for the further development of real estate auction models that can provide insights into this emerging market institution. To facilitate this task a survey of auction theory as pertaining to its application in real estate markets is provided in this paper. Topics addressed includes bidding equilibria, the role of reserve prices, information disclosure, the decision to use auctions, bidder participation, and multiple-object sales. An overview of empirical studies in this area is also provided.