caa a22 4500 445316632 CHVBK 20180317142650.0 cr unu---uuuuu 170323e20110401xx s 000 0 eng 10.1007/s11146-009-9211-1 doi (NATIONALLICENCE)springer-10.1007/s11146-009-9211-1 Market Sentiments, Winner's Curse and Bidding Outcome in Land Auctions [Elektronische Daten] [Maurice Tse, Frederik Pretorius, K. Chau] This paper empirically tests auction theory by examining how the stock market evaluates the outcome of open-bid English auctions of rights to develop residential real estate projects in Hong Kong. To do so, we deconstruct the complexity surrounding actual auction events, and empirically isolate the influence of conflicting auction theory predictions using data from expert opinion around auction events, actual auction event and outcome data, and stock market data. The empirical findings include (1) with increasing uncertainty bidders reduce bids, thus confirming predictions following the winner's curse thesis; (2) joint bidding does not lead to increased bids based on pooled ("better”) information, but instead leads to reduced competition; while increased competition leads to increased prices at auction, as expected; (3) the market interprets auction outcomes as information events which function to signal developers' expectations about future market prospects; but if the winning bid is considered too high, this interpretation is revised to that of the winner's curse; (4) with joint bidding and winning, the market's response to joint winners is better explained by concern for winner's curse (despite supposed better informed bids) than the acquisition of a below cost development project following reduced competition at auction; and (5) the market interprets increased competition at auction as indicator of the future direction of property price movements in the secondary market—the more intense the competition, the more positive the future prospect of the property market are seen to be. Springer Science+Business Media, LLC, 2009 Auction nationallicence Bidding outcome nationallicence Market sentiments nationallicence Winner's curse nationallicence Tse Maurice School of Economics and Finance, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut Pretorius Frederik Department of Real Estate and Construction, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut Chau K. Department of Real Estate and Construction, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut The Journal of Real Estate Finance and Economics Springer US; http://www.springer-ny.com 42/3(2011-04-01), 247-274 0895-5638 42:3<247 2011 42 11146 https://doi.org/10.1007/s11146-009-9211-1 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11146-009-9211-1 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Tse Maurice School of Economics and Finance, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut NATIONALLICENCE 700 1- Pretorius Frederik Department of Real Estate and Construction, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut NATIONALLICENCE 700 1- Chau K. Department of Real Estate and Construction, The University of Hong Kong, Pokfulam Road, Hong Kong, Hong Kong aut NATIONALLICENCE 773 0- The Journal of Real Estate Finance and Economics Springer US; http://www.springer-ny.com 42/3(2011-04-01), 247-274 0895-5638 42:3<247 2011 42 11146 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer