A Multinomial Logit Framework to Estimate Bid Shading in Procurement Auctions: Application to Cattle Sales in the Texas Panhandle
AbstractWe develop an empirical methodology based upon multinomial probability models to estimate the magnitude of bid shading in cattle procurement in the Texas Panhandle region. The methodology works well in settings where data allow a good estimation of a bidder’s probability of winning, but the approach does not rely upon the bidding process following any particular structural framework or on the existence of a control group. Estimated markdowns of price from the competitive level are in the range of 5–10% and are somewhat larger than estimates of oligopsony markdowns from previous studies of cattle procurement in the U.S. Copyright Springer 2005
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Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 27 (2005)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=100336
auction; beef packing; bidding; concentration; multinomial logit; oligopsony;
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