EconPapers    
Economics at your fingertips  
 

Bayesian estimation of bidding process and bidder’s preference under shape restrictions

Dong Li (), Luya Wang () and Ximing Wu
Additional contact information
Luya Wang: The Capital University of Economics and Business
Ximing Wu: Texas A&M University

Empirical Economics, 2021, vol. 60, issue 1, No 7, 157-176

Abstract: Abstract This paper applies a novel nonparametric estimator to the modeling of auctions subject to shape restrictions. In particular, we employ a Bayesian estimator with a Gaussian process prior parameterized by a spectral representation. We use squared Gaussian processes to model the functional derivatives and therefore are able to impose global shape restrictions. Our first application is the estimation of a monotonically increasing bidding process of online auctions. The second application concerns the estimation of bidders’ risk-averse latent preferences in sealed-bid timber auctions. The results show that the shape-constrained estimator not only ensures the conformity with economic theories but also improves estimation precision.

Keywords: Bayesian estimation; Auctions; Shape restrictions; Squared Gaussian processes (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s00181-020-01932-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:empeco:v:60:y:2021:i:1:d:10.1007_s00181-020-01932-1

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-020-01932-1

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-01-11
Handle: RePEc:spr:empeco:v:60:y:2021:i:1:d:10.1007_s00181-020-01932-1