Testing Affiliation in Private-values Models of First-price Auctions Using Grid Distributions
AbstractWithin the private-values paradigm, we construct a tractable empirical model of equilibrium behaviour at first-price auctions when bidders' valuations are potentially dependent, but not necessarily affiliated. We develop a test of affiliation and apply our framework to data from low-price, sealed-bid auctions held by the Department of Transportation in the State ofMichigan to procure road-resurfacing services: we do not reject the hypothesis of affiliation in cost signals.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2009-11.
Length: 24 p.
Date of creation: Dec 2009
Date of revision:
first-price; sealed-bid auctions; affiliation; MTP2;
Find related papers by JEL classification:
- MTP - Business Administration and Business Economics; Marketing; Accounting - - - - -
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
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- Luciano De Castro, 2010. "Affiliation, Equilibrium Existence and Revenue Ranking of Auctions," Discussion Papers 1530, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Luciano De Castro, 2012. "Correlation of Types in Bayesian Games," Discussion Papers 1556, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Luciano I. de Castro, 2009. "Affiliation and Dependence in Economic Models," Discussion Papers 1479, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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