Testing Affiliation in Private-values Models of First-price Auctions Using Grid Distributions

Luciano I. De Castro and Harry Paarsch

No 2009-11, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: Within the private-values paradigm, we construct a tractable empirical model of equilibrium behaviour at first-price auctions when bidders' valuations are potentially dependent, but not necessarily affiliated. We develop a test of affiliation and apply our framework to data from low-price, sealed-bid auctions held by the Department of Transportation in the State ofMichigan to procure road-resurfacing services: we do not reject the hypothesis of affiliation in cost signals.

Keywords: first-price; sealed-bid auctions; affiliation; MTP2 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-12
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2009-11

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