First-Price Sealed-Bid Auctions with Secret Reservation Prices

Elyakime,; Laffont,; Loisel,; Vuong,

doi:10.2307/20075949

Cited by 128 publications

(111 citation statements)

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“…The arguments leading to the identification of bidder valuations from bid data build upon the idea propounded in Elyakime et al (1994) and Guerre et al (2000), but extend the applicability of these ideas to the strategically more complex setting of divisible good/multi-unit auctions. Furthermore, the two estimation methods proposed here are, to my knowledge, novel, and rely very little on specific parametric assumptions.…”

Section: Resultsmentioning

confidence: 99%

“…The identification strategy pursued below builds on the insight of Elyakime et al (1994) and Guerre et al (2000), who utilized the necessary condition for optimality characterizing the optimal bid function in a first-price auction to identify and estimate the valuation distribution of the bidders.…”

Section: Identification Of Marginal Valuations From Bid Datamentioning

confidence: 99%

“…The identification and estimation method employed in this essay extends the nonparametric identification and estimation framework of Elyakime, Laffont, Loisel and Vuong (1994) and Guerre, Perrigne and Vuong (2000) to divisible good auctions, and offers an empirical algorithm that has low computational demands and minimizes the impact of distributional assumptions on estimation results. The statistical properties of the estimation algorithm are also discussed.…”

mentioning

confidence: 99%

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Mechanism Choice and Strategic Bidding in Divisible Good Auctions: An Empirical Analysis of the Turkish Treasury Auction Market

Hortaçsu

McAdams

2010

Journal of Political Economy

218

187

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An important question in the theory of divisible good auctions is to determine whether a discriminatory auction yields higher revenues to the auctioneer than a uniform price or Vickrey auction. This question can be answered empirically using estimates of the bidders' true marginal valuations for the good being auctioned. Based on the share auction model of Wilson (1979), I propose an estimation method to reconstruct the distribution of bidders' marginal valuations using data on individual bids.I apply the method to data from the Turkish Treasury auction market. Using the estimated marginal valuations of the bidders to calculate what the revenue would have been under a uniform price or a Vickrey auction. I find that, ex-post, the discriminatory auction yielded more revenue to the Turkish Treasury than the alternatives. However, in ex-ante expected revenue comparisons, I fail to reject revenue equivalence between the discriminatory auction and the "best-case" outcome of the uniform price auction, in which bidders reveal their valuations truthfully. I investigate the robustness of my results to the presence of a common-value component in bidders' utilities when comparing the revenue performance of the discriminatory and Vickrey mechanisms. I also show that the estimation framework can be generalized to allow for deterministic vs. uncertain supply, asymmetries, and stochastic participation by bidders.

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Section: Resultsmentioning

confidence: 99%

Section: Identification Of Marginal Valuations From Bid Datamentioning

confidence: 99%

mentioning

confidence: 99%

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Mechanism Choice and Strategic Bidding in Divisible Good Auctions: An Empirical Analysis of the Turkish Treasury Auction Market

Hortaçsu

McAdams

2010

Journal of Political Economy

218

187

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“…In order to solve timber allocation problems, many auction models have been used (Mead (1967), Hansen (1985), Paarsch (1991), Elyakime et al (1994Elyakime et al ( , 1997, Baldwin et al (1997), Athey and Levin (2001), Haile (2001), Athey et al (2011)). In practice, formal and informal processes are used to determine the allocation of natural resources.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Multiple-round timber auction design and simulation

Farnia

Frayret

LeBel

et al. 2013

International Journal of Production Economics

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Maison d'édition:Publisher: Elsevier URL officiel:Official URL:http://dx.doi.org/10.1016/j.ijpe.2013.06.012 Mention légale:Legal notice:In all cases accepted manuscripts should link to the formal publication via its DOI 1 Abstract:This paper presents a multiple-round timber auction simulation, developed in order to study various configurations of auction design. In this study, simultaneous sequential timber auctions are modelled and analyzed using agent-based simulation technology. As there are many individual items in the auction to be sold, the auction designer defines several rounds that are sequential at pre-defined intervals. At each round, the auction designer announces several simultaneous auctions. Since bidders are offered different items at each round, a mathematical linear programing model for selecting the best set of items to bid for is presented. Different bidding patterns are simulated and compared in various setup configurations. The most advanced of these strategies are adaptive and use agent-learning capability. The comparisons include the success rate of winning the auction and the winning price per m 3 . This study suggests an efficient bidding pattern for bidders to bid in order to achieve to their goal and increase their profit.Similarly, in order to increase profit, the auctioneer (i.e., the government) needs to control several auction parameters including the number of auctions per year, the lot size, the auction periodicity, and the number of bidders. This study also suggests parameters configurations that to maximize revenue for the auctioneer.

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“…Regular bidders stay forever, while fringe bidders enter the game for one period and then exit. They adopted numerical methods to approximate the value function of a firm, and for estimation they proposed a two-stage estimator that builds off of ideas developed in Elyakime, Laffont, Loisel, and Vuong (1994) and GPV. In the first stage they computed the bidding function conditional on the state variables, and in the second stage they computed both the expected sum of future profits conditional on the distribution of bids as well as the costs using the first-order condition from the dynamic model.…”

Section: Auction Dynamicsmentioning

confidence: 99%

Structural Econometric Methods in Auctions: A Guide to the Literature

Hickman¹,

Hubbard²,

Saglam³

2012

Journal of Econometric Methods

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Auction models have proved to be attractive to structural econometricians who, since the late 1980s, have made substantial progress in identifying and estimating these rich game-theoretic models of bidder behavior. We provide a guide to the literature in which we contrast the various informational structures (paradigms) commonly assumed by researchers and uncover the evolution of the field. We highlight major contributions within each paradigm and benchmark modifications and extensions to these core models. Lastly, we discuss special topics that have received substantial attention among auction researchers in recent years, including auctions for multiple objects, auctions with risk averse bidders, testing between common and private value paradigms, unobserved auction-specific heterogeneity, and accounting for an unobserved number of bidders as well as endogenous entry.Keywords: auctions, structural econometrics. JEL Classification Numbers: C01, D44. * We were all students of Harry J. Paarsch and would like to express our sincere gratitude and appreciation to him. Harry was not only a pioneer of this literature, but he introduced each of us to the field and continues to inspire us today. We would also like to thank two anonymous referees for helpful suggestions. Any errors are our own.

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First-Price Sealed-Bid Auctions with Secret Reservation Prices

Cited by 128 publications

References 0 publications

Mechanism Choice and Strategic Bidding in Divisible Good Auctions: An Empirical Analysis of the Turkish Treasury Auction Market

Mechanism Choice and Strategic Bidding in Divisible Good Auctions: An Empirical Analysis of the Turkish Treasury Auction Market

Multiple-round timber auction design and simulation

Structural Econometric Methods in Auctions: A Guide to the Literature

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