Rev Ind Organ (2010) 37:1–2
Introduction: Economic Issues in Auctions
Victor J. Tremblay
Published online: 18 June 2010
© Springer Science+Business Media, LLC. 2010
Auctions have been used to sell goods and services for thousands of years. Records of
Babylonian slave auctions date back to 500 B.C. The famous auction houses of Sot-
heby’s and Christie’s began in the 1700s and continue to be successful by specializing
in the sale of rare works of art.
Research on the economics of auctions did not ﬂourish until auctions became a
more common way of selling goods and services. Research interest rose when the
U.S Government decided to auction off the right to drill for offshore oil in the 1970s.
Beginning in the 1990s, the government auctioned off radio spectrum for use by cell
phone providers. In the last 15 years, growth of the Internet has made Internet auc-
tions feasible. Internet auctions have lowered the cost of bringing sellers together with
potential buyers who may be scattered around the globe. Today, millions of people
participate in Internet auctions for a wide range of items such as consumer collectables,
clothing, electronic equipment, automobiles, and real estate.
As auctions became a more common way of doing business, economic theorists
have worked to identify auctions that are Pareto efﬁcient and are the most profitable
for sellers. The proliferation of sales by auction has generated more data, making it
possible to empirically analyze buyer and seller behavior and the efﬁciency of real
The articles in this series address a number of important issues on the economics
of auctions. The ﬁrst paper by Kevin Hasker and Robin Sickles contains a survey
of the auctions found on eBay, the leading Internet auctioneer in the world. eBay’s
behavior is interesting in general, as it uses several selling formats besides auctions.
In addition, eBay auctions are not consistent with all of the formal bidding rules of
V. J. Tremblay (
Department of Economics, Oregon State University, 303 Ballard Extension Hall, Corvallis,
Oregon 97331-3612, USA