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Regulating bidder participation in auctions

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Listed:
  • Vivek Bhattacharya
  • James W. Roberts
  • Andrew Sweeting

Abstract

type="main"> Regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry. We show that the relative performance of two such mechanisms, a standard first-price auction with free entry and an entry rights auction, depends nonmonotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism. As an empirical application, we estimate parameters from first-price auctions with free entry for bridge-building contracts in Oklahoma and Texas and predict that an entry rights auction increases efficiency and reduces procurement costs significantly.

Suggested Citation

  • Vivek Bhattacharya & James W. Roberts & Andrew Sweeting, 2014. "Regulating bidder participation in auctions," RAND Journal of Economics, RAND Corporation, vol. 45(4), pages 675-704, December.
  • Handle: RePEc:bla:randje:v:45:y:2014:i:4:p:675-704
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    File URL: http://hdl.handle.net/10.1111/1756-2171.12067
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gentry, Matthew & Li, Tong & Lu, Jingfeng, 2017. "Auctions with selective entry," LSE Research Online Documents on Economics 83664, London School of Economics and Political Science, LSE Library.
    2. repec:eee:gamebe:v:105:y:2017:i:c:p:104-111 is not listed on IDEAS
    3. repec:oup:emjrnl:v:22:y:2019:i:1:p:c1-c19. is not listed on IDEAS
    4. Ari Hyytinen & Sofia Lundberg & Otto Toivanen, 2015. " Design of public procurement auctions: Evidence from cleaning contracts," Working Papers Department of Managerial Economics, Strategy and Innovation (MSI) 483670, KU Leuven, Faculty of Economics and Business, Department of Managerial Economics, Strategy and Innovation (MSI).
    5. José-Antonio Espín-Sánchez & Álvaro Parra, 2018. "Entry Games under Private Information," Cowles Foundation Discussion Papers 2126, Cowles Foundation for Research in Economics, Yale University.
    6. Sweeting, Andrew & Bhattacharya, Vivek, 2015. "Selective entry and auction design," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 189-207.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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