On the Number and Heterogeneity of Bidders in Livestock Auctions |
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| Authors: | Bruno Larue Sébastien Pouliot Mohamed Jeddy |
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| Institution: | 1. Canada Research Chair in International Agri‐Food Trade, CREATE, 2425 rue de l’Agriculture, local 4417 pavillon Paul‐Comtois, U. Laval, Québec, QC;2. Department of Economics, Iowa State University, Ames, IA;3. CREATE, U. Laval, 2425 rue de l'Agriculture, pavillon Paul‐Comtois, University of Laval, Québec, QC |
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| Abstract: | We show in the context of livestock auctions that a seller's revenue may increase or decrease as the number of buyers increases, whether the additional bidder wins or not an object. Additional bidders who fill part of their demand from an outside source may have an even more adverse effect on prices. We use data from the Quebec daily hog auction to measure the effect of new bidders on auction prices. Variations in the number of bidders come from the entry and exit of Quebec packers and sporadic invitations extended to Ontario packers. We find that entry by Quebec packers had a significant positive impact on hog auction prices but that sporadic participation by Ontario packers did not have a significant impact on hog prices. |
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