IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/doi10.1086-709970.html
   My bibliography  Save this article

Identification in Auction Models with Interdependent Costs

Author

Listed:
  • Paulo Somaini

Abstract

This paper provides a nonparametric identification result for procurement models with asymmetric bidders, dependent private information, and interdependent costs. For risk-neutral bidders, the model’s payoff-relevant primitives are the joint distribution of private information and each bidder’s full-information expected cost. The joint distribution of bids identifies the joint distribution of signals. First-order conditions identify the expected cost conditional on tying with at least one competitor for the lowest bid. I show identification of each bidder’s full-information cost, using variation in competitors’ cost shifters that are excludable from bidders’ own full-information costs, and generate variation in the set of competitors’ signals that induce a tie for the lowest bid. I estimate the relevant payoff primitives using data from Michigan highway procurements and evaluate policies that affect the winner’s curse’s severity.

Suggested Citation

  • Paulo Somaini, 2020. "Identification in Auction Models with Interdependent Costs," Journal of Political Economy, University of Chicago Press, vol. 128(10), pages 3820-3871.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/709970
    DOI: 10.1086/709970
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/709970
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/709970
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/709970?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carnehl, Christoph & Weiergraeber, Stefan, 2023. "Bidder asymmetries in procurement auctions: Efficiency vs. information – Evidence from railway passenger services," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    2. Dirk Bergemann & Benjamin Brooks & Stephen Morris, 2022. "Counterfactuals with Latent Information," American Economic Review, American Economic Association, vol. 112(1), pages 343-368, January.
    3. Kevin Leyton-Brown & Paul Milgrom & Neil Newman & Ilya Segal, 2023. "Artificial Intelligence and Market Design: Lessons Learned from Radio Spectrum Reallocation," NBER Chapters, in: New Directions in Market Design, National Bureau of Economic Research, Inc.
    4. Lu, Jiaxuan, 2023. "The economics of China’s between-city height competition: A regression discontinuity approach," Regional Science and Urban Economics, Elsevier, vol. 100(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:doi:10.1086/709970. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.