Identification and Estimation of Auction Model with Two-Dimensional Unobserved Heterogeneity
AbstractThis paper investigates the empirical importance of allowing for multi-dimensional sources of unobserved heterogeneity in auction models with private information. It in turn develops the estimation procedure that recovers the distribution of private information in the presence of two distinct sources of unobserved heterogeneity. It is shown that this estimation procedure identifies components of the model and produces uniformly consistent estimators of these components. The estimation procedure is applied to the data from highway procurement. The results of the estimation indicate that allowing for two-dimensional unobserved heterogeneity may significantly affect the results of estimation as well as policy-relevant instruments derived from the estimated distributions of bidders’ costs.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 10-036.
Length: 44 pages
Date of creation: 03 May 2010
Date of revision:
unobserved auction heterogeneity; procurement auctions; reserve price;
Find related papers by JEL classification:
- L0 - Industrial Organization - - General
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L8 - Industrial Organization - - Industry Studies: Services
- M3 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mireia Jofre-Bonet & Martin Pesendorfer, 2001.
"Estimation of a Dynamic Auction Game,"
NBER Working Papers
8626, National Bureau of Economic Research, Inc.
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