Quantifying the cost of excess market thickness in timber sale auctions

Xiaoyong Zheng ()

International Journal of Industrial Organization, 2009, vol. 27, issue 5, 553-566

Abstract: In auctions with endogenous entry, theory predicts that too many potential bidders, or the excess market thickness, may actually decrease the seller's expected revenue and the social welfare generated by the auction. This paper proposes a computationally easy method for estimating the optimal number of potential bidders in timber sale auctions with endogenous entry and an uncertain number of active bidders and then quantifies the cost of excess market thickness. It is found that the welfare loss due to the excess market thickness is moderate in this market.

Keywords: Timber; auctions; Excess; market; thickness; Entry (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-7187(09)00008-3
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:5:p:553-566

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().