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| Author: | Marks, D. |
| Title: | Who pays brokers' commissions? Evidence from fine wine auctions |
| Journal: | Oxford Economic Papers
2009 : OCT, VOL. 61:4, p. 761-775 |
| Index terms: | auctions bidding brokerage commission wine industry |
| Language: | eng |
| Abstract: | As brokers, the auction houses routinely charge successful bidders a broker's commission (henceforth as: b-c/s.), a percent of their successful bids. This study deals with the extent to which differences in b-c/s. are reflected in differences in winning bids in fine wine auctions, based on an unusually detailed collection of auction data for Bordeaux wine. Herein, a 'natural experiment' for testing the incidence of b-c/s. is provided. The data allow test of the extent to which the b-c/s. charged to buyers is reflected in the buyers' bids and also a reasonably comprehensive explanation of variations in wine auction prices. It is found out that buyers' premia are capitalized fully into bids with bids falling accordingly with obvious consequences for the proceeds from the sale. |
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