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Résumé 39 :

Credit and Participation in Slave Auctions: Evidence for Adverse Selection
GOTHELF, Nicolas ; VERARDI, Vincenzo

Our paper examines the impact of credit on bidder participation in slave auctions held in New Orleans from 1804 to 1862. Participation is inferred from the residuals of a hedonic regression, which takes into account slave and auction characteristics, using the symmetric independent private values auction model. Estimating participation with GEV approach and dealing with endogeneity issues by using treatment regression, we find that credit reduces participation, which can only be rationalized if adverse selection is present and bidders infer negative information from the availability of credit. These findings add to the existing literature inferring adverse selection from prices.