On the Asymptotic Distribution of the Transaction Price in a Clock Model of a Multi-Unit, Oral, Ascending-Price Auction within the Common-Value Paradigm
AbstractUsing a clock model of a multi-unit, oral, ascending-price auction, within the commonvalue paradigm, we analyse the asymptotic behaviour of the transaction price as the number of bidders gets large. We find that even though the transaction price is determined by a (potentially small) fraction of losing drop-out bids, that price converges in probability to the ex ante unknown, true value. Subsequently, we derive the asymptotic distribution of the transaction price. Finally, we apply our methods to data from an auction of taxi license plates held in Shenzhen, China.
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Bibliographic InfoPaper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 186.
Length: 36 pages
Date of creation: 2010
Date of revision:
common value; information aggregation; multi-unit auctions; taxis;
Other versions of this item:
- Hong, Han & Paarsch, Harry J. & Xu, Pai, 2010. "On the Asymptotic Distribution of the Transaction Price in a Clock Model of a Multi-Unit, Oral, Ascending-Price Auction within the Common-Value Paradigm," CEI Working Paper Series, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University 2010-8, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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