Sealed Bids or Oral Auctions: Which Yield Higher Prices?

Abstract

Listen

Translate article

Abstract When national forest timber is sold by sealed bid, prices tend to be higher than in sales by oral auction. This conclusion is derived from analyses of 1977 data from seven Forest Service regions (or zones)–all west of the Mississippi River--where both sales methods were used. The differential was greater for large sales than for small, and greater in regions where timber processors are numerous than where one-bid sales are common. The primary analysis was in terms of overbids, i.e., prices in excess of the Forest Service's appraised values; but comparisons of net and gross stumpage prices yielded the same conclusions. There was no strong indication that dependent mills changed their bidding patterns, or lost their timber supply, when sealed bids were used.