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Reserve Price Signaling With Public Information: Evidence From Online Auto Auctions

Junyan Guan & Boli Xu

RAND Journal of Economics2026https://doi.org/10.1111/1756-2171.70047article
AJG 4ABDC A*
Weight
0.50

Abstract

This article considers an auction model in which a seller's choice of reserve price signals her private information about the object's quality. We show that the signaling incentive would lower the seller's payoff and the probability of sale. We estimate the model using a novel dataset from a large online auto auction platform. Counterfactual simulations suggest that a secret reserve price could shut down the signaling incentive and improve both the seller's payoff and the probability of sale, which supports the prevalent use of secret reserve prices in practice.

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https://doi.org/https://doi.org/10.1111/1756-2171.70047

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@article{junyan2026,
  title        = {{Reserve Price Signaling With Public Information: Evidence From Online Auto Auctions}},
  author       = {Junyan Guan & Boli Xu},
  journal      = {RAND Journal of Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/1756-2171.70047},
}

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Reserve Price Signaling With Public Information: Evidence From Online Auto Auctions

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.