Comparing Open and Sealed Bid Auctions: Evidence from Timber Auctions

Susan Athey, Jonathan Levin and Enrique Seira

No 08-012, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: We study entry and bidding patterns in sealed bid and open auctions with heterogeneous bidders. Using data from U.S. Forest Service timber auctions, we document a set of systematic effects of auction format: sealed bid auctions attract more small bidders, shift the allocation towards these bidders, and can also generate higher revenue. We show that a private value auction model with endogenous participation can account for these qualitative effects of auction format. We estimate the model's parameters and show that it can explain the quantitative effects as well. Finally, we use the model to provide an assessment of bidder competitiveness, which has important consequences for auction choice.

Keywords: Open Auction; Sealed Bid Auction (search for similar items in EconPapers)
JEL-codes: C70 (search for similar items in EconPapers)
Date: 2008-12
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Comparing open and Sealed Bid Auctions: Evidence from Timber Auctions (2011)
Working Paper: Comparing Open and Sealed Bid Auctions: Evidence from Timber Auctions (2008)
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