Regulating bidder participation in auctions

Vivek Bhattacharya, James W. Roberts and Andrew Sweeting

RAND Journal of Economics, 2014, vol. 45, issue 4, 675-704

Abstract: type="main">

Regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry. We show that the relative performance of two such mechanisms, a standard first-price auction with free entry and an entry rights auction, depends nonmonotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism. As an empirical application, we estimate parameters from first-price auctions with free entry for bridge-building contracts in Oklahoma and Texas and predict that an entry rights auction increases efficiency and reduces procurement costs significantly.

Date: 2014
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Citations: View citations in EconPapers (19)

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Working Paper: Regulating Bidder Participation in Auctions (2013)
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