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Articles 1 - 3 of 3
Full-Text Articles in Social and Behavioral Sciences
Identification And Inference In First-Price Auctions With Risk Averse Bidders And Selective Entry, Xiaohong Chen, Matthew Gentry, Tong Li, Jingfeng Lu
Identification And Inference In First-Price Auctions With Risk Averse Bidders And Selective Entry, Xiaohong Chen, Matthew Gentry, Tong Li, Jingfeng Lu
Cowles Foundation Discussion Papers
We study identification and inference in first-price auctions with risk averse bidders and selective entry, building on a flexible entry and bidding framework we call the Affiliated Signal with Risk Aversion (AS-RA) model. Assuming that the econometrician observes either exogenous variation in the number of potential bidders (N) or a continuous instrument (z) shifting opportunity costs of entry, we provide a sharp characterization of the nonparametric restrictions implied by equilibrium bidding. Given variation in either competition or costs, this characterization implies that risk neutrality is nonparametrically testable in the sense that if bidders are strictly risk averse, then no risk …
Opportunity Cost, Inattention And The Bidder's Curse, David J. Freeman, Erik O. Kimbrough, J. Philipp Reiss
Opportunity Cost, Inattention And The Bidder's Curse, David J. Freeman, Erik O. Kimbrough, J. Philipp Reiss
Economics Faculty Articles and Research
Auction winners sometimes suffer a “bidder’s curse”, paying more for an item at auction than the fixed price charged for an identical item by other sellers. This seemingly irrational behavior is puzzling because the information necessary to avoid overpaying would appear to be readily available to bidders, yet they seem to ignore it. To understand this behavior, we consider the bidders’ decisions whether to acquire information about the fixed price before bidding, in the presence of opportunity costs. Our theory introduces costly information acquisition into an auction model, with a fixed price aftermarket selling an identical good. When information about …
A Computational And Experimental Examination Of The Fcc Incentive Auction, Logan Gantner
A Computational And Experimental Examination Of The Fcc Incentive Auction, Logan Gantner
Computational and Data Sciences (PhD) Dissertations
In 2016, the Federal Communications Commission debuted a new auction mechanism, the Incentive Auction, with the intention of obtaining high frequency television broadcasting spectrum, repurposing it for cellular use, and reselling these licenses at profitable prices. In designing this process, the traditional mechanism used for spectrum auctions, the Simulta- neous Multiple Round Auction (SMR), was modified in order to speed the process. This new mechanism, the Incentive Forward Auction (IFA), intended to reduce the number of rounds per auction by lumping similar spectrum licenses together. However, the IFA discourages straightforward bidding strategies and can result in bidders committing more in …