A consistent nonparametric test of affiliation in auction models

Sung Jae Jun, Joris Pinkse and Yuanyuan Wan

Journal of Econometrics, 2010, vol. 159, issue 1, 46-54

Abstract: We propose a new nonparametric test of affiliation, a strong form of positive dependence with independence as a special, knife-edge, case. The test is consistent against all departures from the null of affiliation, and its null distribution is standard normal. Like most nonparametric tests, a sample-size dependent input parameter is needed. We provide an informal procedure for choosing the input parameter and evaluate the test's performance using a simulation study. Our test can be used to test the fundamental assumptions of the auctions literature. We implement our test empirically using the Outer Continental Shelf (OCS) auction data.

Keywords: Auction; models; Affiliation; Empirical; distributions; Nonparametric; tests (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:159:y:2010:i:1:p:46-54

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