Ascending auctions with bidder asymmetries

We present a partial identification approach for ascending auctions wit bidder asymmetries, where bidders' asymmetric types may be unobservable to the econometrician. Our approach yields sharp bounds and builds on and generalizes other recent bounds approaches for correlated private values asce...

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Bibliographic Details
Published in:Quantitative economics 2017-03, Vol.8 (1), p.181-200
Main Authors: Coey, Dominic, Larsen, Bradley, Sweeney, Kane, Waisman, Caio
Format: Article
Language:English
Subjects:
Ascending auction
asymmetries
Asymmetry
Auctions
C10
correlated values
D44
Econometrics
Economic models
L10
partial identification
Prices
Timber
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Summary:We present a partial identification approach for ascending auctions wit bidder asymmetries, where bidders' asymmetric types may be unobservable to the econometrician. Our approach yields sharp bounds and builds on and generalizes other recent bounds approaches for correlated private values ascending auctions. When bidder identities are observable , our approach yields tighter bounds than previous approaches that ignore asymmetry, demonstrating that bidder asymmetries can function as an aid rather than a hindrance to identification. We present a nonparametric estimation and inference approach relying on our identification argument and apply it to data from U.S. timber auctions, finding that bounds on optimal reserve prices and other objects of interest are noticeably tighter when exploiting bidder asymmetries.
ISSN:1759-7331
1759-7323
1759-7331
DOI:10.3982/QE474