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Information and Competition in U.S. Forest Service Timber Auctions

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Listed:
  • Susan Athey
  • Jonathan Levin

Abstract

This paper analyzes the role of private information in U.S. Forest Service timber auctions. In these auctions, firms bid a per unit price for each timber species. Total bids are computed by multiplying these prices by Forest Service volume estimates, but payments depend on actual volumes harvested. We develop an equilibrium theory for these auctions. We then relate (ex post) data about volume to (ex ante) bids. We show that bidders have private information about volumes of species and use it as predicted by theory. Differences in bidder estimates appear to affect the allocation of tracts, but competition limits information rents.

Suggested Citation

  • Susan Athey & Jonathan Levin, 2001. "Information and Competition in U.S. Forest Service Timber Auctions," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 375-417, April.
    • Handle: RePEc:ucp:jpolec:v:109:y:2001:i:2:p:375-417
    DOI: 10.1086/319558
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    References listed on IDEAS

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    1. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    2. Ronald M. Harstad & Michael H. Rothkopf, 2000. "An "Alternating Recognition" Model of English Auctions," Management Science, INFORMS, vol. 46(1), pages 1-12, January.
    3. Haile,P.A., 1999. "Auctions with resale," Working papers 33, Wisconsin Madison - Social Systems.
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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