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Preferences and performance in simultaneous first-price auctions: a structural analysis

Gentry, Matthew, Komarova, Tatiana ORCID: 0000-0002-6581-5097 and Schiraldi, Pasquale ORCID: 0000-0003-2469-1734 (2022) Preferences and performance in simultaneous first-price auctions: a structural analysis. Review of Economic Studies. ISSN 0034-6527

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Identification Number: 10.1093/restud/rdac030

Abstract

Motivated by the prevalence of simultaneous bidding across a wide range of auction markets, we develop and estimate a model of strategic interaction in simultaneous first-price auctions when objects are heterogeneous and bidders have non-additive preferences over combinations. We establish non-parametric identification of primitives in this model under standard exclusion restrictions, providing a basis for both estimation and testing of preferences over combinations. We then apply our model to data on Michigan Department of Transportation (MDOT) highway procurement auctions, quantifying the magnitude of cost synergies and evaluating the performance of the simultaneous first-price mechanism in the MDOT marketplace.

Item Type: Article
Official URL: https://academic.oup.com/restud
Additional Information: © 2022 The Authors
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
JEL classification: D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
Date Deposited: 21 Jul 2022 16:27
Last Modified: 14 Sep 2022 14:36
URI: http://eprints.lse.ac.uk/id/eprint/115627

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