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What model for entry in first-price auctions? A nonparametric approach

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  • Marmer, Vadim
  • Shneyerov, Artyom
  • Xu, Pai

Abstract

We develop a selective entry model for first-price auctions that nests two polar models often estimated in the empirical literature on auctions, Levin and Smith (1994), and Samuelson (1985). The selective entry model features a pro-competitive selection effect. The selection effect is shown to be nonparametrically identifiable, and a nonparametric test for its presence is proposed. This test can be used to discriminate between the two polar models.

Suggested Citation

  • Marmer, Vadim & Shneyerov, Artyom & Xu, Pai, 2013. "What model for entry in first-price auctions? A nonparametric approach," Journal of Econometrics, Elsevier, vol. 176(1), pages 46-58.
    • Handle: RePEc:eee:econom:v:176:y:2013:i:1:p:46-58
    DOI: 10.1016/j.jeconom.2013.04.005
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    More about this item

    Keywords

    First-price auctions; Models of entry; Selective entry; Selection effect; Nonparametric estimation; Quantiles;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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