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Within the context of takeovers, this paper shows that in private-value auctions the optimal individually rational strategy for a bidder with partial ownership of the item is to overbid, i.e., to bid more than his valuation. This strategy, however, can lead to i) an inefficient outcome, and ii) the winning bidder making a net loss. Further, the overbidding result implies that the presence of a large shareholder increases the bid premium in single-bidder takeovers at the expense of reducing the probability of the takeover actually occurring. [ABSTRACT FROM AUTHOR]

This paper documents that firms face upward-sloping supply curves when they repurchase shares in a Dutch auction, and it analyzes the market reaction to these offers. The announcement price increase is highly correlated with the ultimate repurchase premium. Prices decline at expiration only for pro-rated offers. The cumulative return is positive and highly correlated with the repurchase premium, excepting pro-rated offers. Much of this price increase is consistent with movement along an upward-sloping supply curve. Trading volume around the Dutch auction parallels fixed-price repurchases. Supply elasticity is larger for firms with large trading volume, firms included in the S&P 500 Index, and takeover targets. [ABSTRACT FROM AUTHOR]

We compare three forms of common stock repurchases. Dutch-auction self-tender offers and open-market share repurchase programs are weaker signals of stock undervaluation than fixed-price self-tender offers. The price increase from buyback announcements is greater when insider wealth is at risk, greater following negative net-of-market stock returns, and unrelated to prior market returns. Buyback announcement returns are also increasing in the fraction of shares sought, which is consistent with both signalling and an upward-sloping supply curve for stock. [ABSTRACT FROM AUTHOR]

This paper measures the returns to investing in violins, using two different datasets. One dataset includes 337 observations on repeat sales of the same violins at auction and at dealer sales starting in the mid-nineteenth century, and another dataset includes over 2,500 observations on sales of individual violins at auction since 1980. Overall, real returns for the dataset on repeat sales for the period 1850-2008 have been approximately 3.5%. Real returns to the overall portfolio of individual sales since 1980 have been about 3.3%. The price path has been stable with a slight negative correlation to stocks and bonds. ( JEL D44, G11, L82) [ABSTRACT FROM AUTHOR]

The paper compares the returns to acquired firms in single and multiple bidder acquisitions. Immediately after the announcement of the first bid, the mean abnormal returns accumulated by targets acquired in single bid acquisitions (SBAs) and multiple bid acquisitions (MBAs) are not statistically different. However, following the announcement of the second bid, there are evident differences, with the targets acquired in MBAs exhibiting significantly higher abnormal returns. This precludes the commonly accepted rational competitive acquisition hypothesis as a potential explanation of the results. Thus, the second bidder in multiple bidder situations most likely does not join the bidding as a result of observing an unusually low first bid. [ABSTRACT FROM AUTHOR]

Parimutuel principles are widely used as an alternative to fixed odds gambling in which a bookmaker acts as a dealer by quoting fixed rates of return on specified wagers. A parimutuel game is conducted as a call auction in which odds are allowed to fluctuate during the betting period until the betting period is closed or the auction‘called’. The prices or odds of wagers are set based upon the relative amounts wagered on each risky outcome. In financial microstructure terms, trading under parimutuel principles is characterised by(1) call auction, non-continuous trading;(2) riskless funding of claim payouts using the amounts paid for all of the claims during the auction;(3) special equilibrium pricing conditions requiring the relative prices of contingent claims equal the relative aggregate amounts wagered on such claims;(4) endogenous determination of unique state prices; and(5) higher efficiency. Recently, a number of large investment banks have adopted a parimutuel mechanism for offering contingent claims on various economic indices, such as the US Nonfarm payroll report and Eurozone Harmonised inflation.Our paper shows how the market microstructure incorporating parimutuel principles for contingent claims which allows for notional transactions, limit orders, and bundling of claims across states is constructed. We prove the existence of a unique price equilibrium for such a market and suggest an algorithm for computing the equilibrium.We also suggest that for a broad class of contingent claims, that the parimutuel microstructure recently deployed offers many advantages over the dominant dealer and exchange continuous time mechanisms. [ABSTRACT FROM AUTHOR]

We investigate differences in purchase premiums and returns of common stock the day following the offer expiration of firms conducting Dutch auction self-tender offers versus those conducting fixed-price self-tender offers to see whether firms overpay for shares in fixed-price offers. After controlling for the proportion of shares sought and firm size, no statistically significant differences in premiums or returns are found between the two types of offers. [ABSTRACT FROM AUTHOR]

This study investigates how vertical (quality‐related) and horizontal (taste‐related) differentiation influences the probability of sale and market price of auctioned artworks. We explore a new art market, namely, original comic works. By including unsold lots, we correct the selection bias commonly found in the literature. We propose an original set of variables accounting for vertical differentiation in this market (i.e., commercial and critical successes, the artist's reputation, role, and recognition). Vertically differentiated artworks do not sell better, but warrant a premium. Regarding horizontal differentiation, newly explored variables have a significant effect on sales and (often) auction prices. [ABSTRACT FROM AUTHOR]

Examines association between valuation outcomes for bidders of contests for corporate control where an auction occurs, and the specifics of the compensation packages for the managers of the bidding firms. Motivation for managers to increase the size of the firm through acquisition; Multiple bidders for a common target firm; Analysis of sequence of bidding in corporate control contests.

This study investigates the effects of switching to a closing continuous trading (CCT) on market quality, while considering the trading behaviors of different types of traders. Investors become more patient in the period preceding the last trading phase, which reduces the bid–ask spread (BAS) in that period. We find an increase in the BAS and volatility during the last trading phase, due to diminishing investor patience. Market volatility and the closing pricing errors relate positively to the trading activities of foreign institutional investors. Overall, the introduction of the CCT worsens the market quality before the closing. [ABSTRACT FROM AUTHOR]

We study an important recent series of buyback auctions conducted by the U.S. Treasury in retiring $67.5 billion of its illiquid off-the-run debt. The Treasury was successful in buying back large amounts of illiquid debt while suffering only a small market-impact cost. The Treasury included the most-illiquid bonds more frequently in the auctions, but tended to buy back the least-illiquid of these bonds. Although the Treasury had the option to cherry pick from among the bonds offered, we find that the Treasury was actually penalized for being spread too thinly in the buybacks. [ABSTRACT FROM AUTHOR]

This study constructs a quarterly hedonic price index using 64,203 artworks, by seventy-one well-known modern and contemporary Australian artists, sold at auction houses over the period 1986-2009. The hedonic regression model includes characteristics such as name and living status of the artist, the size and medium of the painting, and the auction house, quarter and year in which the painting was sold. The resulting index indicates that returns on Australian fine-art averaged one per cent in nominal terms over the period from quarter 1 1986 to quarter 4 2009 with a standard deviation of seventeen per cent. During the global financial crisis spanning quarter 1 2008 and quarter 4 2009, the average art returns declined in nominal terms by close to six per cent with a standard deviation of twenty-one per cent. This study also shows that over the entire period the art market only marginally underperformed the stock and housing markets. The low correlations between these markets suggest the benefits of portfolio diversification. [ABSTRACT FROM AUTHOR]

Using a large data set with 80,214 repeat sales, we find that the real return on a diversified portfolio of modern prints sold at auctions worldwide averaged a modest 1.51% during the period 1977–2004. We address several issues regarding the performance of modern prints as investments: the selection bias arising from the self-interest of auction houses; the impact of an ever-expanding universe of auction houses on investment returns; the “masterpiece” effect, or whether more expensive works of art outperform the market as a whole; and the differences in returns that arise due to random fluctuations in collector tastes. ( JEL Z11, G11, G14) [ABSTRACT FROM AUTHOR]

The article focuses on the first workshop held by the Federal Energy Regulatory Commission staff on October 20, 1998. The "workshop" centered on the proposed system of mandatory auctions for pipeline capacity. The issue of the absence of a reserve price in the daily auction is so critical that, unless the commission confronts and resolves it early, there is no way this whole initiative is going to work. The commission has proposed to defeat its own stated policy goals. Injecting the bottomless daily auction into this industry would be like using Ebola fever as a flu vaccine. Unfortunately, at the workshop, comments were entertained only on the question of whether we would prefer Ebola Zaire or Ebola Warburg.