Regulating Bidder Participation in Auctions

Vivek Bhattacharya, James W. Roberts and Andrew Sweeting

No 19352, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Regulating bidder participation in auctions can potentially increase efficiency compared to standard auction formats with free entry. We show that the relative performance of two such mechanisms, a standard first-price auction with free entry and an entry rights auction, depends non-monotonically on the precision of information that bidders have about their costs prior to deciding whether to participate in a mechanism. As an empirical application, we estimate parameters from first-price auctions with free entry for bridge-building contracts in Oklahoma and Texas and predict that an entry rights auction increases efficiency and reduces procurement costs significantly.

JEL-codes: C72 D44 L20 L92 (search for similar items in EconPapers)
Date: 2013-08
Note: IO
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Citations: View citations in EconPapers (1)

Published as Vivek Bhattacharya & James W. Roberts & Andrew Sweeting, 2014. "Regulating bidder participation in auctions," RAND Journal of Economics, RAND Corporation, vol. 45(4), pages 675-704, December.

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Journal Article: Regulating bidder participation in auctions (2014)
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