Set-Asides and Subsidies in Auctions
AbstractSet-asides and subsidies are used extensively in government procurement and resource sales. We analyze these policies in an empirical model of US Forest Service timber auctions. The model fits the data well both within the sample of unrestricted sales used for estimation, and when we predict (out-of-sample) outcomes for small business set-asides. Our estimates suggest that restricting entry substantially reduces efficiency and revenue, although it increases small business participation. An alternative policy of subsidizing small bidders would increase revenue and small bidder profit, with little efficiency cost. We explain these findings by connecting to the theory of optimal auction design. (JEL D44, H57, L73, Q23)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Microeconomics.
Volume (Year): 5 (2013)
Issue (Month): 1 (February)
Other versions of this item:
- Susan Athey & Dominic Coey & Jonathan Levin, 2011. "Set-Asides and Subsidies in Auctions," Discussion Papers 10-017, Stanford Institute for Economic Policy Research.
- Susan Athey & Dominic Coey & Jonathan Levin, 2011. "Set-Asides and Subsidies in Auctions," NBER Working Papers 16851, National Bureau of Economic Research, Inc.
- Jonathan Levin & Susan Athey, 2007. "Set-Asides and Subsidies in Auctions," 2007 Meeting Papers 571, Society for Economic Dynamics.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
- L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products
- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Susan Athey & Jonathan Levin & Enrique Seira, 2004.
"Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions,"
122247000000000524, UCLA Department of Economics.
- Susan Athey, 2005. "Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions," Theory workshop papers 658612000000000098, UCLA Department of Economics.
- Jonathan Levin & Susan Athey & Enrique Seira, 2004. "Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions," Working Papers 2004.142, Fondazione Eni Enrico Mattei.
- Susan Athey & Jonathan Levin, 2001.
"Information and Competition in U.S. Forest Service Timber Auctions,"
Journal of Political Economy,
University of Chicago Press, vol. 109(2), pages 375-417, April.
- Susan Athey & Jonathan Levin, 1999. "Information and Competition in U.S. Forest Service Timber Auctions," NBER Working Papers 7185, National Bureau of Economic Research, Inc.
- Susan Athey & Jonathan Levin, 1999. "Information and Competition in U.S. Forest Service Timber Auctions," Working papers 99-12, Massachusetts Institute of Technology (MIT), Department of Economics.
- Levin, Jonathan & Athey, Susan, 2001. "Information and Competition in U.S. Forest Service Timber Auctions," Scholarly Articles 3612768, Harvard University Department of Economics.
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- Butler, Jeffrey & Carbone, Enrica & Conzo, Pierluigi & Spagnolo, Giancarlo, 2012. "Reputation and Entry," SITE Working Paper Series 21, Stockholm Institute of Transition Economics, Stockholm School of Economics.
- Jeffrey V. Butler & Enrica Carbone & Pierluigi Conzo & Giancarlo Spagnolo, 2012. "Reputation and Entry," EIEF Working Papers Series 1215, Einaudi Institute for Economics and Finance (EIEF), revised Nov 2012.
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- Jun Nakabayashi, 2010.
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gd09-126, Institute of Economic Research, Hitotsubashi University.
- Jun Nakabayashi, 2009. "Small Business Set-asides in Procurement Auctions: An Empirical Analysis," Tsukuba Economics Working Papers 2009-005, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba, revised Nov 2009.
- Klenio Barbosa & Pierre C. Boyer, 2012. "Discrimination in Dynamic Procurement Design with Learning-by-doing," CESifo Working Paper Series 3947, CESifo Group Munich.
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