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Preferences and performance in simultaneous first-price auctions: a structural analysis

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  • Gentry, Matthew
  • Komarova, Tatiana
  • Schiraldi, Pasquale

Abstract

Motivated by the prevalence of simultaneous bidding across a wide range of auction markets, we develop and estimate a model of strategic interaction in simultaneous first-price auctions when objects are heterogeneous and bidders have non-additive preferences over combinations. We establish non-parametric identification of primitives in this model under standard exclusion restrictions, providing a basis for both estimation and testing of preferences over combinations. We then apply our model to data on Michigan Department of Transportation (MDOT) highway procurement auctions, quantifying the magnitude of cost synergies and evaluating the performance of the simultaneous first-price mechanism in the MDOT marketplace.

Suggested Citation

  • Gentry, Matthew & Komarova, Tatiana & Schiraldi, Pasquale, 2023. "Preferences and performance in simultaneous first-price auctions: a structural analysis," LSE Research Online Documents on Economics 115627, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:115627
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    File URL: http://eprints.lse.ac.uk/115627/
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    References listed on IDEAS

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    More about this item

    Keywords

    auctions; complementarities; identification; ES/N000056/1; UKRI fund;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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