Identification and Estimation of Auction Model with Two-Dimensional Unobserved Heterogeneity

Elena Krasnokutskaya ()

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper investigates the empirical importance of allowing for multi-dimensional sources of unobserved heterogeneity in auction models with private information. It in turn develops the estimation procedure that recovers the distribution of private information in the presence of two distinct sources of unobserved heterogeneity. It is shown that this estimation procedure identifies components of the model and produces uniformly consistent estimators of these components. The estimation procedure is applied to the data from highway procurement. The results of the estimation indicate that allowing for two-dimensional unobserved heterogeneity may significantly affect the results of estimation as well as policy-relevant instruments derived from the estimated distributions of bidders’ costs.

Keywords: unobserved auction heterogeneity; procurement auctions; reserve price (search for similar items in EconPapers)
JEL-codes: L0 L1 L2 L8 M3 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2010-05-03
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economics.sas.upenn.edu/sites/default/file ... ng-papers/10-036.pdf (application/pdf)

Related works:
Journal Article: IDENTIFICATION AND ESTIMATION OF AUCTION MODEL WITH TWO‐DIMENSIONAL UNOBSERVED HETEROGENEITY (2012)
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:pen:papers:10-036

Access Statistics for this paper

More papers in PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania 133 South 36th Street, Philadelphia, PA 19104. Contact information at EDIRC.
Bibliographic data for series maintained by Administrator ().