THE ECONOMETRICS OF ENGLISH AUCTIONS

Matthew Shum ()

Working Papers from University of Toronto, Department of Economics

Abstract: We characterize Bayesian Nash equilibria for asymmetric ascending auctions in which both common and private value components are accommodated, and bidders' valuations and signals are drawn from asymmetric distributions. It is shown that the equilibrium inverse bid functions in each round of the auction can be solved from a system of equations formed from bidders' expectations of the value of the object conditional on all information available during that round. The computational tractability of this characterization allows us to analytically solve for the equilibrium bidding strategies in a log-normal model. This forms the basis of an econometric model which we estimate using data from the PCS spectrum auctions run by the U.S. Federal Communications Commission.

JEL-codes: C51 D44 D82 L96 (search for similar items in EconPapers)
Pages: 41 pages
Date: 1998-09-21
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:mshum-98-02

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