The mathematical complexity of auction theory has restricted empirical work to qualitative tests of its basic predictions, with mixed results. This paper exploits the theory of order statistics to derive a Nash bid function that is linear in its parameters , allowing direct estimati on by linear least squares. The bid function is fitted to a cross section of auctions for highway construction contracts from thirty-three states, and provides support for several hypotheses of the theory of common-value auctions. Copyright 1988 by American Economic Association.
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Volume (Year): 78 (1988) Issue (Month): 5 (December) Pages: 884-95 Download reference. The following formats are available: HTML
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