A Point Decision For Partially Identified Auction Models

Gaurab Aryal () and Dong-Hyuk Kim ()

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: This paper proposes a decision theoretic method to choose a single reserve price for partially identified auction models, such as Haile and Tamer, 2003, using data on transaction prices from English auctions. The paper employs Gilboa and Schmeidler, 1989 for inference that is robust with respect to the prior over unidentified parameters. It is optimal to interpret the transaction price as the highest value, and maximize the posterior mean of the seller’s revenue. The Monte Carlo study shows substantial gains relative to the average revenues of the Haile and Tamer interval.

JEL-codes: C11 C44 D44 E61 (search for similar items in EconPapers)
Pages: 23 Pages
Date: 2012-01
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Journal Article: A Point Decision for Partially Identified Auction Models (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2012-569

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