Multidimensional Auctions of Contracts: An Empirical Analysis

Yunmi Kong, Isabelle Perrigne and Quang Vuong

American Economic Review, 2022, vol. 112, issue 5, 1703-36

Abstract: In this paper, we conduct a structural analysis of multi-attribute auctions of contracts with a general allocation rule when private information is multidimensional. Upon modeling bidders' contract value that accounts for their endogenous ex post actions, we non-parametrically identify bidders' private information from their bids and estimate their joint distribution. Analyzing cash-royalty auctions of Louisiana oil leases, we find government revenue worse and development rates no better than in a cash auction with a fixed royalty in view of adverse selection and moral hazard. Our findings revise conventional wisdom on the optimality of multi-attribute auctions.

JEL-codes: D44 D82 D86 H82 Q35 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1257/aer.20200864

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