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Econometric Models of Asymmetric Ascending Auctions

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  • Han Hong
  • Matthew Shum

Abstract

We develop econometric models of ascending (English) auctions which allow for both bidder asymmetries as well as common and/or private value components in bidders' underlying valuations We show that the equilibrium inverse bid functions in each round of the auction are implicitly defined (pointwise) by a system of nonlinear equations so that conditions for the existence and uniqueness of an increasing-strategy equilibrium are essentially identical to those which ensure a unique and increasing solution to the system of equations We exploit the computational tractability of this characterization in order to develop an econometric model thus extending the literature on structural estimation of auction models Finally an empirical example illustrates how equilibrium learning affects bidding during the course of the auction

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Bibliographic Info

Paper provided by The Johns Hopkins University,Department of Economics in its series Economics Working Paper Archive with number 453.

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Date of creation: Aug 2001
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Handle: RePEc:jhu:papers:453

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Citations

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Cited by:
  1. Quang Vuong & Sandra Campo & Isabelle Perrigne, 2003. "Asymmetry in first-price auctions with affiliated private values," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(2), pages 179-207.
  2. Jeremy T. Fox & Patrick Bajari, 2013. "Measuring the Efficiency of an FCC Spectrum Auction," American Economic Journal: Microeconomics, American Economic Association, vol. 5(1), pages 100-146, February.
  3. A. Banerji & J. V. Meenakshi, 2004. "Millers, Commission Agents and Collusion in Grain Auction Markets: Evidence from Basmati Auctions in North India," Working papers 129, Centre for Development Economics, Delhi School of Economics.
  4. Dirk Bergemann & Stephen Morris, 2006. "Robust Implementation: The Case of Direct Mechanisms," Levine's Bibliography 122247000000001194, UCLA Department of Economics.
  5. Jose Canals-Cerda, 2005. "Congestion Pricing in an Internet Market," Working Papers 05-10, NET Institute, revised Sep 2005.
  6. Meenakshi, J.V. & Banerji, A., 2005. "The unsupportable support price: an analysis of collusion and government intervention in paddy auction markets in North India," Journal of Development Economics, Elsevier, vol. 76(2), pages 377-403, April.
  7. Tong Li & Xiaoyong Zheng, 2006. "Entry and competition effects in first-price auctions: theory and evidence from procurement auctions," CeMMAP working papers CWP13/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  8. Philip Haile, 2000. "Inference with an Incomplete Model of English Auctions," Econometric Society World Congress 2000 Contributed Papers 1546, Econometric Society.
  9. Dirk Bergemann & Stephen Morris, 2009. "Robust Implementation in Direct Mechanisms," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1175-1204.
  10. Bikhchandani,S. & Haile,P.A. & Riley,J.G., 2000. "Symmetric separating equilibria in English auctions," Working papers 17R, Wisconsin Madison - Social Systems.
  11. William C. Horrace, 2003. "On Ranking and Selection from Independent Truncated Normal Distributions," Econometrics 0306009, EconWPA.
  12. Park, Minsoo & Lee, Sang-Woo & Choi, Yong-Jae, 2011. "Does spectrum auctioning harm consumers? Lessons from 3G licensing," Information Economics and Policy, Elsevier, vol. 23(1), pages 118-126, March.
  13. Bajari, Patrick & Fox, Jeremy, 2005. "Complementarities and Collusion in an FCC Spectrum Auction," Working paper 293, Regulation2point0.
  14. Li, Tong, 2010. "Indirect inference in structural econometric models," Journal of Econometrics, Elsevier, vol. 157(1), pages 120-128, July.
  15. Barry O'Neill, 2006. "Nuclear Weapons and National Prestige," Cowles Foundation Discussion Papers 1560, Cowles Foundation for Research in Economics, Yale University.
  16. A. Banerji, 2010. "Millers, Commission Agents and Collusion in Grain Auction Markets: Evidence From Basmati Auctions in North India," Working Papers id:2891, eSocialSciences.

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