The 53rd Frontier Forum for Digital Technology and Finance

Abstract：

We study shill bidding—price inflation without purchase intent—in China’s judicial housing auctions, the world’s largest court-run platform. Using granular bid data on timing, frequency and speed to identify shills, we leverage the 2017 Jiangsu High Court’s stricter default penalties as a quasi-experiment, applying difference-in-differences and city-level dishonest debtor cases as instrumental variables for causality. Results: shills exist in 8% of auctions, raising premiums by14.3% (annual $80M transfer from buyers to debtors); post-reform, treated courts saw 8.2% lower premiums and14-20% less shill activity. Shills intensify genuine bidder competition with higher frequency and faster speed; their impact is mitigated by high deposits/strong institutions but amplified in high-trust/fraud regions. We provide first large-scale causal evidence of judicial housing auction fraud, revealing hidden welfare losses from weak enforcement and guiding online asset market platform/judicial design.

Speaker Introduction：

Prof. Maggie Rong Hu is currently an Assistant Professor at Zicklin School of Business, Baruch College. Her primary research interests include real estate finance, household finance, and empirical corporate finance. Her research has been published in leading journals such as American Economic Review, Management Science, Information Systems Research, Journal of Financial and Quantitative Analysis, Review of Finance, and Real Estate Economics. Her papers have received multiple Best Paper Awards at leading international conferences and have won several competitive research grants.