The simple algebra of surplus in private values open auctions: A nested logit merger model

Luke Froeb, Vladimir Mares (), Steven Tschantz () and Charles Taragin ()
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Vladimir Mares: INSEAD
Steven Tschantz: Vanderbilt University
Charles Taragin: US Dept. of Justice, Washington

Economics Bulletin, 2018, vol. 38, issue 4, 2304-2312

Abstract: In a private values, open auction, we show that bidder surplus can be expressed as a simple difference between unconditional moments of order statistics. The strength of the result is its simplicity and generality, as we dispense with the typical assumptions of independence or symmetry. We show how to use the expression to derive closed-form expressions for the effects of a merger among bidders for any joint value distribution.

Keywords: Surplus; Private-Values Auctions; Merger; Antitrust; Horizontal Anticompetitive Practices (search for similar items in EconPapers)
JEL-codes: D4 L4 (search for similar items in EconPapers)
Date: 2018-12-02
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Citations: View citations in EconPapers (1)

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