Estimating Revenue Under Collusion-Proof Auctions
AbstractWe propose a method to nonparametriclly estimate the revenue under a auction that is efficient and resilient to collusion [Chen and Micali, 2012]. Efficiency is achieved on account of a lower revenue and we propose a method to quantify this efficiency-revenue trade-off, i.e. the extra cost for which efficient allocation can be guaranteed even when bidders collude. We implement a local polynomial estimation method on sample of California highway procurements data and find that to achieve efficiency the cost of procurement must increase by at lest 10.8% and can go up to 48.8% depending on the size of bidding-ring.
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Bibliographic InfoPaper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2012-597.
Length: 28 Pages
Date of creation: Dec 2012
Date of revision:
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L4 - Industrial Organization - - Antitrust Issues and Policies
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- Florencia M. Gabrielli, 2013. "Detecting Collusion on Highway Procurement," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 127-165, January-D.
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