Asymmetry in first-price auctions with affiliated private values

Quang Vuong, Sandra Campo and Isabelle Perrigne
Additional contact information
Quang Vuong: University of Southern California, Department of Economics, Los Angeles, CA 90089-0253, USA, Postal: University of Southern California, Department of Economics, Los Angeles, CA 90089-0253, USA
Sandra Campo: University of North Carolina, Department of Economics, Chapel Hill, NC 27599-3305, USA, Postal: University of North Carolina, Department of Economics, Chapel Hill, NC 27599-3305, USA
Isabelle Perrigne: University of Southern California, Department of Economics, Los Angeles, CA 90089-0253, USA, Postal: University of Southern California, Department of Economics, Los Angeles, CA 90089-0253, USA

Journal of Applied Econometrics, 2003, vol. 18, issue 2, 179-207

Abstract: Collusion and heterogeneity across firms may introduce asymmetry in bidding games. A major difficulty in asymmetric auctions is that the Bayesian Nash equilibrium strategies are solutions of an intractable system of differential equations. We propose a simple method for estimating asymmetric first-price auctions with affiliated private values. Considering two types of bidders, we show that these differential equations can be rewritten using the observed bid distribution. We establish the identification of the model, characterize its theoretical restrictions, and propose a two-step non-parametric estimation procedure for estimating the private value distributions. An empirical analysis of joint bidding in OCS auctions is provided. Copyright © 2003 John Wiley & Sons, Ltd.

Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

Downloads: (external link)
http://hdl.handle.net/10.1002/jae.697 Link to full text; subscription required (text/html)
http://qed.econ.queensu.ca:80/jae/2003-v18.2/ Supporting data files and programs (text/html)

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:jae:japmet:v:18:y:2003:i:2:p:179-207

Ordering information: This journal article can be ordered from
http://www3.intersci ... e.jsp?issn=0883-7252

DOI: 10.1002/jae.697

Access Statistics for this article

Journal of Applied Econometrics is currently edited by M. Hashem Pesaran

More articles in Journal of Applied Econometrics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().