prices and the winner s curse we usually assume that increases in supply allocation by rationing and exclusion of potential buyers reduce prices but all these activities raise the expected price in an important set of cases when common value assets are sold furthermore when we make the assumptions needed to rule out these anomalies for symmetric buyers small asymmetries among the buyers necessarily cause the anomalies to reappear our results help explain rationing in initial public offerings and outcomes of spectrum auctions we illustrate our results in the wallet game and in another new game we introduce the maximum game

gambian women unequal partners in rice development projects agricultural development projects usually channel inputs to male household heads on the assumption that they control the land labour crops and finances this assumption is challenged for the mandinka women cultivate rainfed rice having ownership or use rights to rice land while men control upland and grow groundnuts and millets both cultivate household and personal crops three development projects introduced irrigated rice to men who therefore control this land and crop failure to involve women in rice development schemes has not only increased their economic dependence on men but is also a major reason for deficiencies in these projects and low national rice production

empirical implications of equilibrium bidding in first price symmetric common value auctions this paper studies federal auctions for wildcat leases on the outer continental shelf from 1954 to 1970 these are leases where bidders privately acquire at some cost noisy but equally informative signals about the amount of oil and gas that may be present we develop tests of rational and equilibrium bidding in a common values model that are implemented using data on bids and ex post values we also use data on tract location and exposr values to test the comparative static prediction that bidders may bid less aggressively in common value auctions when they expect more competition we find that bidders are aware of the winner s curse and their bidding is largely consistent with equilibrium

nonparametric estimation of sample selection models sample selection models provide an important way of accounting for economic decisions that combine discrete and continuous choices and of correcting for nonrandom sampling nonparametric estimators for these models are developed in this paper these can be used for estimating shapes and important economic quantities as in standard nonparametnc regression endogeneity of regressors of interest is allowed for series estimators for these models are developed which are useful for imposing additivity restnctions that arise from selection corrections convergence rates and asymptotic normality results are derived an application to returns to schooling among australian young females is given

recent progress in the empirical analysis of multi unit auctions abstract i discuss some recent progress in the empirical analysis of multi unit auctions through which a number of important commodities treasury bills and bonds electricity emission permits monetary infusions by some central banks are allocated

testing for affiliation in first price auctions using entry behavior in this article we show that affiliation among potential bidders private information either private signals or entry costs leads to affiliation among their entry decisions we propose a test for affiliation among potential bidders private information based on the implication of affiliation on the entry behavior which is general and widely applicable to various scenarios the test is implemented using the simulation based method we then apply our method to timber sales in the oregon department of forestry and find a small but strongly significant level of affiliation among all timber companies

structural estimation of the affiliated private value auction model we consider the structural estimation of the affiliated private value apv model in first price sealed bid auctions the model allows for bidders individual efficiencies and opportunity costs while permitting dependence among bidders private values through affiliation we establish the nonparametric identification of the apv model characterize its theoretical restrictions and propose a computationally convenient and consistent two step nonparametric estimation procedure for estimating the joint private value distribution from observed bids using simulated bid data we provide a step by step guide on how to implement our procedure and show the good behavior of our estimator in small samples

equilibrium in auctions with entry the authors model entry incentives in auctions with risk neutral bidders and characterize a symmetric equilibrium in which the number of entrants is stochastic the presence of too many potential bidders raises coordination costs that detract from welfare the authors show that the seller and society can benefit from policies that reduce market thickness i e the relative abundance of buyers their analysis extends well known revenue equivalence and ranking theorems but also demonstrates that variations in the auction environment affect optimal policies e g reservation prices in ways not anticipated by models that ignore entry copyright 1994 by american economic association

informational rents in oil and gas concession auctions in brazil abstract this article aims to estimate the informational rents earned by winning bidders in oil and gas exploration and production auctions in brazil we estimate the distributions of bids and bidders private valuations using a nonparametric structural model and assuming independence and asymmetry between participants petrobras the brazilian state owned petroleum giant and former oil sector monopolist was considered a competitor that was distinct from other competitors thus we investigate a database based on information from all auctions held between 1999 and 2008 the results suggest that petrobras earned significantly higher information rents than other competitors such rents ranged from 15 to 63 depending on the number and type of competitors

competition based environmental policy an analysis of farmland preservation in maryland policy makers have turned to competition based voluntary enrollment programs as a cost effective way to achieve preferred land uses this paper studies bidder behavior in an innovative auction based program in which farmers compete to sell and retire the right to develop their land we derive a reduced form bidding model that includes private and common values this model allows us to estimate the role of bidder competition winner s curse correction and the underlying distribution of private values we estimate that the auction enrolled as many as 3 000 acres 12 more than a take it or leave it offer would have enrolled for the same budgetary cost

exploring adolescents knowledge perceptions and attitudes towards renewable energy sources a colour choice approach abstract this paper sheds light on adolescents knowledge perceptions and attitudes towards renewable energy sources res in order to detect their particular educational needs considering adolescents as key players in energy policy implementation we focused on devising effective and efficient strategies in educational policy at secondary formal education drawing on the responses of 234 students at two high schools in a typical greek provincial town and employing multinomial logistic regression analysis we detected their demands through four coloured lenses pink white green and blue the analysis points out that the curriculum should be developed on the basis of four main strategic directions equity flexibility enhancement of the participatory approach and creativity so as to meet students indifference neutrality and confusion about energy issues and res technologies but also help them explore new potential career paths and grow into active citizens in light of the limitations in res education our results could be generalised and contribute to effective policy making

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

numerical analysis of asymmetric first price auctions abstract we propose numerical algorithms for solving first price auction problems where bidders draw independent valuations from heterogeneous distributions the heterogeneity analyzed in this work is what might naturally emerge when subsets of distributionally homogeneous bidders collude bid functions and expected revenues are calculated for two special cases extensions to more general asymmetric first price auctions are discussed journal of economic literature classification numbers d44 c63 c72 d82

common values and low reserve prices i show that the benefit of a high reserve price in a common values ascending auction is lower than in the observationally equivalent private values setting put another way when bidders have common values empirical estimation based on a private values model will overstate the value of a high reserve price via numerical examples i show this same ranking typically applies to the level of the optimal reserve price as well and often to the benefit of any reserve price not just high ones with common values the optimal reserve can even be below the seller s valuation which is impossible with private values

the affiliation effect in first price auctions we study the monotonicity of the equilibrium bid with respect to the number of bidders n in affiliated private value models of first price sealed bid auctions and prove the existence of a large class of such models in which the equilibrium bid function is not increasing in n we moreover decompose the effect of a change in n on the bid level into a competition effect and an affiliation effect the latter suggests to the winner of the auction that competition is less intense than she had thought before the auction since the affiliation effect can occur in both private and common value models a negative relationship between the bid level and n does not allow one to distinguish between the two models and is also not necessarily only due to bidders taking account of the winner s curse

an empirical study of auction revenue rankings the case of municipal bonds using a novel dataset of 386 rst price municipal bond auctions held in california i perform counterfactual revenue comparisons based on the theoretical result of milgrom and weber 1982 i show that the revenue in the second price auction is non parametrically identi ed and the counterfactual revenue in the english auction can be bounded in an informative way these results form a

what is the global potential for renewable energy abstract world energy demand is projected to rise to 1000 ej ej 1018 j or more by 2050 if economic growth continues its course of recent decades both reserve depletion and greenhouse gas emissions will necessitate a major shift from fossil fuels as the dominant energy source since nuclear power is now unlikely to increase its present modest share renewable energy re will have to provide for most energy in the future this paper addresses the questions of what energy levels re can eventually provide and in what time frame we find that when the energy costs of energy are considered it is unlikely that re can provide anywhere near a 1000 ej by 2050 we further show that the overall technical potential for re will fall if climate change continues we conclude that the global shift to re will have to be accompanied by large reductions in overall energy use for environmental sustainability

rational expectations information acquisition and competitive bidding most rational expectations market equilibrium models are not models of price formation and naive mechanisms leading to such equilibria can be severely manipulable in this paper a bidding model is developed which has the market like features that bidders act as price takers and that prices convey information higher equilibrium prices convey more favorable information about the quality of the objects being sold than do lower prices bidders can benefit from trading only if they have a transactions motive or if they have access to inside information apart from exceptional cases prices are not fully revealing a two stage model is developed in which bidders may acquire information at a cost before bidding and for which the equilibrium price is fully revealing resolving a well known paradox

testing for common costs in the city of helsinki bus transit auctions abstract i study the effects of competition in the city of helsinki bus transit market by conducting two tests for common costs in these first price sealed bid procurement auctions i introduce bidder asymmetry and pooling to the tests i also discuss the need for robustness checks for some arbitrary choices in these tests the information environment seems to be that of common costs the bus companies that have garages close to the contracted routes are influenced more by the common elements than those whose garages are further away more competition does not necessarily lower procurement costs and the city should not necessarily implement costly policies to induce more competition a recent merger of two public companies cannot be criticized from a competition perspective

estimating risk aversion from ascending and sealed bid auctions the case of timber auction data estimating bidders risk aversion in auctions is a challeging problem because of identification issues this paper takes advantage of bidding data from two auction designs to identify nonparametrically the bidders utility function within a private value framework in particular ascending auction data allow us to recover the latent distribution of private values while first price sealed bid auction data allow us to recover the bidders utility function this leads to a nonparametric estimator an application to the us forest service timber auctions is proposed estimated utility functions display concavity which can be partly captured by constant relative risk aversion

effects of technological change in agriculture on food consumption and nutrition rice in a west african setting abstract this paper traces the effects of technological change in agriculture to production and income effects and to consumption and nutritional effects the study environment is west africa the gambia the technological change considered is various new modes of rice production versus traditional rice production main findings of this empirical analysis are the following 1 it cannot be assumed that by focusing investment on a woman s crop one helps women farmers the more a new technology increased labor productivity in rice the more there was a takeover of the rice production technology by male producers and the more the crop became a communal crop for household food security household income increased substantially 2 much of the increased income is spent on increased calorie consumption it makes no difference for the degree of change in calorie consumption levels if change in real income is in the form of cash or subsistence food 3 technological change effects mediated through income are traced to increased food consumption calories at the household level where it is found to significantly improve children s nutritional status especially in the rainy season

changes in beef packers market power after the livestock mandatory price reporting act an agent based auction controversy remains about the effectiveness of the 1999 livestock mandatory price reporting act mpra we determine the likely changes in beef packers market power after the mpra by using an agent based first price common value auction past research has employed cournot models but we use an auction model which more closely resembles the actual cattle procurement process we find that feeders benefit from the mpra regardless of whether price uncertainty decreases for packers and or feeders if the packers price uncertainty is reduced the feeder benefits from an increase in competition between the packers if the feeder s price uncertainty is reduced the feeder benefits from imposing more accurate reserve prices copyright 2013 oxford university press

when should sellers use auctions the simultaneous bid auction is a standard method for sellers to solicit offers from buyers a simple alternative is for a seller to ask buyers to make offers sequentially if it is costly for buyers to participate the sequential mechanism will tend to be more efficient than the simultaneous auction because later potential buyers can condition their participation decisions on earlier bids however the sequential mechanism s greater efficiency may not produce higher revenues because while the possibility of deterring later potential entrants can lead early bidders to bid aggressively the fact that later firms might be deterred will tend to reduce revenues the relative revenue performance of the mechanisms will therefore depend on whether the threat of potential future competition which can raise bids in the sequential mechanism is more valuable to the seller than actual competition which will tend to be greater in the simultaneous auction the relative revenue performance of these alternative mechanisms has direct implications for how assets should be sold in the case of how to structure the sale of corporations this question has attracted attention from practitioners and commentators since the delaware supreme court s 1986 revlon decision charged a board overseeing the sale of a company with the duty of getting the best price for the stockholders revlon v mcandrews and forbes holdings 1986 in practice

semiparametric estimation of first price auctions with risk averse bidders in view of the non identification of the first price auction model with risk averse bidders this paper proposes some parametric identifying restrictions and a semiparametric estimator for the risk aversion parameter s and the latent distribution of private values specifically we exploit heterogeneity across auctioned objects to establish semiparametric identification under a conditional quantile restriction of the bidders private value distribution and a parameterization of the bidders utility function we develop a multistep semiparametric method and we show that our semiparametric estimator of the utility function parameter s converges at the optimal rate which is slower than the parametric one but independent of the dimension of the exogenous variables thereby avoiding the curse of dimensionality we then consider various extensions including a binding reserve price affiliation among private values and asymmetric bidders the method is illustrated on u s forest service timber sales and bidders risk neutrality is rejected

the electricity consumption and economic growth nexus evidence from greece abstract this paper attempts to cast light into the relationship between electricity consumption and economic growth in greece in a multivariate framework for this purpose we used cointegration techniques and the vector error correction model in order to capture short run and long run dynamics over the sample period 1970 2011 the empirical results reveal that in the long run electricity demand appears to be price inelastic and income elastic while in the short run the relevant elasticities are below unity we also argue that the causal relationship between electricity consumption and economic growth in greece is bi directional our results strengthen the notion that greece is an energy dependent country and well directed energy conservation policies could even boost economic growth furthermore the implementation of renewable energy sources should provide significant benefits ensuring sufficient security of supply in the greek energy system this evidence can provide a new basis for discussion on the appropriate design and implementation of environmental and energy policies for greece and other medium sized economies with similar characteristics

asymmetry in procurement auctions evidence from snow removal contracts differences in cost efficiency and productivity across firms may introduce asymmetries in procure ment auctions relying on a structural approach this article investigates potential asymmetry among firms bidding for snow removal contracts in montrthe empirical results show that firms located in close proximity have a cost advantage relative to other firms in the most urbanised part of montrbecause of prohibitive equipment storage costs the extent of inefficiency due to asym metry is empirically assessed various policy experiments are performed a bidding preference policy shows that the city could expect to reduce its costs for allocating snow removal contracts when bidders willingness to pay depends in part on observable variables the princi pal s interest is not best served by creating a level auction playing field this article studies procurement auctions for snow removal contracts in montrit investigates the degree to which companies in disadvantageous locations should win even if they do not submit the lowest bid from the submitted bids a novel empirical methodology estimates the extent of cost variation across firms along with its variation within loca tion although the dispersion is substantial the gain from treating bidders unequally is limited when observed individual characteristics affect the firms costs and their bidding strategies all bidders cannot be treated alike these differences in characteristics or asymmetries among bidders may arise from their size as noted by laffont et al 1995 their capacity constraints as in jofre bonet and pesendorfer 2003 or the possession of better information as in hendricks and porter 1988 and hendricks et al 1994

auctions versus posted price selling the case of correlated private valuations two popular selling methods are compared in a one period correlated private values model the seller of an object has to decide whether to sell it by posting a fixed price or by an auction without auctioning costs an auction with a reserve price is always preferable with positive auctioning costs the authors find that an auction is still preferable when the distribution of buyers valuations is sufficiently dispersed or when the object value is sufficiently high the relations between these and previous results are also discussed

identification and estimation of stochastic bargaining models stochastic sequential bargaining models merlo and wilson 1995 1998 have found wide applications in different fields including political economy and macroeconomics due to their flexibility in explaining delays in reaching an agreement this paper presents new results in nonparametric identification and estimation of such models under different data scenarios

identification and estimation of auction models with unobserved heterogeneity in many procurement auctions the bidders unobserved costs depend both on a common shock and on idiosyncratic private information assuming a multiplicative structure i derive sufficient conditions under which the model is identified and propose a non parametric estimation procedure that results in uniformly consistent estimators of the cost components distributions the estimation procedure is applied to data from michigan highway procurement auctions private information is estimated to account for 34 of the variation in bidders costs it is shown that accounting for unobserved auction heterogeneity has important implications for the evaluation of the distribution of rents efficiency and optimal auction design

development planning in the gambia the gap between planners and farmers perceptions expectations and objectives abstract this paper challenges the prevalent view that irrigation development largely depends on engineering agricultural and managerial inputs and argues with reference to gambian irrigation projects that new technologies may be adapted by farmers in ways that are incompatible with planners objectives the conclusion is that planners need to give greater attention to the organization and control of production and consumption within the household this would require a change in attitudes among many planners the recruitment of more social scientists into planning teams and greater co operation between planners farmers of all socio economic categories and extension agents

maize is life malawi s delayed green revolution abstract the pattern of maize seed development in malawi demonstrates the importance of farmers capacity to articulate their interests through collective action and institutions despite the vital significance of maize as a wage good in malawi limited effective demand for maize seed research prolonged the period of technical stagnation analysis of the institutional factors shaping the demand for maize seed research complements previous work on malawi s political economy the supply of seed technology and adoption with implications for current political changes in that nation the importance of farmers organizations and state commitment to agricultural research in sub saharan africa

increasing competition and the winner s curse evidence from procurement we assess empirically the effects of the winner s curse which in common value auctions counsels more conservative bidding as the number of competitors increases first we construct an econometric model of an auction in which bidders preferences have both common and private value components and propose a new monotone quantile approach which facilitates estimation of this model second we estimate the model using bids from procurement auctions held by the state of new jersey for a large subset of these auctions we find that median procurement costs rise as competition intensifies in this setting then asymmetric information overturns the common economic wisdom that more competition is always desirable

strategies for renewable energy applications in the organization of islamic conference oic countries abstract presently the demand of energy is met by fossil fuels combustion of fossil fuels has caused negative impacts to the environment globally the most significant ones are acid precipitation stratospheric ozone depletion and global climate change to overcome it sustainable clean and safe energy policies that would satisfy the energy demand of the 21st century have to be implemented renewable energy resources appear to be the one of the most efficient and effective solutions therefore be key energy sources for the future there is an intimate connection between renewable energy and sustainable development current status of renewable energy applications its implementation strategies and their obstacles for some of the selected islamic countries has been presented several strategies for enhancing of widespread application of renewable energy technology are described the strategies include establishing education and capacity building programs creating renewable energy market and financing mechanism improving appropriate energy policies and establishing database and international collaboration to promote renewable energy technologies

performance responses to competition across skill levels in rank order tournaments field evidence and implications for tournament design tournaments are widely used in the economy to organize production and innovation we study individual data on 2775 contestants in 755 software algorithm development contests with random assignment the performance response to added contestants varies nonmonotonically across contestants of different abilities precisely conforming to theoretical predictions most participants respond negatively whereas the highest skilled contestants respond positively in counterfactual simulations we interpret a number of tournament design policies number of competitors prize allocation and structure number of divisions open entry and assess their effectiveness in shaping optimal tournament outcomes for a designer

renewable energy policy and public perceptions of renewable energy a cultural theory approach abstract public opposition to the siting of renewable energy re facilities and public reluctance to invest in re remain key obstacles to the expansion of the renewables sector in the uk and a number of other european countries although there is a growing body of qualitative research on factors that inform public attitudes towards re the majority of studies have tended to be quantitative and to view the public and public opinion as homogeneous wholes this study uses a cultural theory framework and focus groups conducted in the south west uk to develop deeper understandings of how individuals worldviews can inform opinions and behaviour in relation to re these findings are used to explore ways in which government policies on re might be tailored to engender greater public support and participation issues discussed include the provision of economic incentives information on climate change and re linking renewables to overall energy behaviour and landscape aesthetics

simultaneous allocation of bundled goods through auctions assessing the case for joint bidding we study the costs and benefits of allowing joint bidding in multiple simultaneous first price sealed bid auctions for bundled goods with private values joint bidding raises the prospect of higher allocative efficiency but also reduces the number of bidders resulting in an ambiguous net impact on seller revenue the research was carried out using laboratory experiments in which groups of up to six buyers competed for eight bundles of two separable goods each the main results show that in our experimental environment allowing joint bidding increases efficiency by 11 3 and revenue by 9 4 the research has immediate applications to the sale of public forest stands that arbor a mixture of species for this reason we explore how the results are affected by excess supply the presence of dominant firms and the removal of an allocation rule requiring multiple bidders under certain circumstances

identification of standard auction models this paper presents new identification results for models of first price second price ascending english and descending dutch auctions we consider a general specification of the latent demand and information structure nesting both private values and common values models and allowing correlated types as well as ex ante asymmetry we address identification of a series of nested models and derive testable restrictions enabling discrimination between models on the basis of observed data the simplest model symmetric independent private values is nonparametrically identified even if only the transaction price from each auction is observed for richer models identification and testable restrictions may be obtained when additional information of one or more of the following types is available i the identity of the winning bidder or other bidders ii one or more bids in addition to the transaction price iii exogenous variation in the number of bidders iv bidder specific covariates while many private values pv models are nonparametrically identified and testable with commonly available data identification of common values cv models requires stringent assumptions nonetheless the pv model can be tested against the cv alternative even when neither model is identified

valuing dealers informational advantage a study of canadian treasury auctions in many financial markets dealers have the advantage of observing the orders of their customers to quantify the economic benefit that dealers derive from this advantage we study detailed data from canadian treasury auctions where dealers observe customer bids while preparing their own bids in this setting dealers can use information on customer bids to learn about i competition that is the distribution of competing bids in the auction and ii fundamentals that is the ex post value of the security being auctioned we devise formal hypothesis tests for both sources of informational advantage in our data we do not find evidence that dealers are learning about fundamentals we find that the information about competition contained in customer bids accounts for 13 27 of dealers expected profits

competition in the economic crisis analysis of procurement auctions we study the effects of the recent economic crisis on firms bidding behavior and markups in sealed bid auctions using data from austrian construction procurements we estimate bidders construction costs within a private value auction model we find that markups of all bids submitted decrease by 1 5 percentage points in the recent economic crisis markups of winning bids decrease by 3 3 percentage points we also find that without the government stimulus package this decrease would have been larger these two pieces of evidence point to pro cyclical markups

socially just support mechanisms for the promotion of renewable energy sources in greece abstract although development of renewable energy sources res projects is essential for the greek national economy to revive cut downs of public spends in greece may equally well extend to affect res support mechanisms in this context an integrated cost benefit analysis is currently undertaken concerning res investments in the greek electricity sector more specifically social support compared with financial benefits accruing from such energy stations reveals hidden imbalances that urge for the reform of the current support status examination of representative case studies currently provided considers the three most widespread res i e wind energy hydropower and solar energy with special emphasis given on the determination of break even feed in tariffs fits and the comparison of life cycle electricity production cost between res and conventional power stations

bounds on revenue distributions in counterfactual auctions with reserve prices measuring auction revenues under counterfactual reserve prices or formats requires knowledge of distributions of bidders values and private signals this poses a challenge when bids are observed from rst price common value auctions i bound counterfactual revenue distributions without imposing parametric restrictions on the model structure using data from u s municipal bond auctions i nd rst price and second price auctions under optimal reserve prices lead to little improvement in revenues over existing rst price formats the number of bidders has a more signi cant impact on revenues in optimal auctions i also nd invoking an incorrect assumption of private values in counterfactual analyses results in small errors in predicting revenues from optimal sp auctions

reserve price effects in auctions estimates from multiple regression discontinuity designs i introduction online auctions are an important trading mechanism in modern economies ebay alone has 81 million active users worldwide and auctions a billion objects annually ebay 2009 as data from auction settings has become accessible especially from online auction environments there has been a surge in empirical analysis testing whether the behavior of buyers and sellers is consistent with auction theory bajari and hortacsu 2004 we contribute to this empirical literature by presenting evidence from 260 000 online auctions of second hand cars that took place between january 2003 and november 2008 we identify the impact of a common feature of online and offline auctions public reserve prices on a rich set of auction outcomes 1 to establish causality we present evidence from multiple regression discontinuity rd research designs an empirical method that has not been used in the earlier literature to test the predictions of auction theory guided by theory we first identify the impact of reserve prices on various standard margins of bidder s behavior such as their entry into auctions bidding behavior within the auction and ultimately the winning bid we then combine these estimates to shed light on whether the reserve prices set by the auctioneer indeed maximize her ex ante expected revenue at a final stage we exploit our rich data to provide new insights that have not previously been documented in the empirical auctions literature such as the impact of reserve prices on i bidder s search behavior and ii the composition and characteristics of bidders this new evidence helps shed light on how to best characterize this environment in terms of whether bidders endogenously enter auctions and whether they hold symmetric valuations or not our analysis has broad relevance in three regards first car sales through auctions form an important share of the market the value of cars sold via auction in the united states was 89 billion in 2007 and used car dealers filled over 30 of their inventory via auctions roberts 2013 second the auction mechanism used in our setting an open ascending second price auction that allows proxy bidding is widely suggested to be the most prevalent online auction format bajari and hortacsu 2004 third the specific auction design feature we study reserve prices is commonly observed in online and offline formats the first set of outcomes we study are motivated by the theoretical auction literature these relate to the impact of reserve prices on winning bids the number of entrants that is the number of bidders that place at least one bid and the probability the object is sold 2 theory suggests reserve price impacts on these margins depend on three factors i whether bidders have private or common valuations of the auctioned object ii whether bidder entry is exogenous or endogenous and iii whether the reserve price signals the auctioneer s private information on the true value of the auctioned object in exogenous entry models predictions about the impact of reserve prices on these outcomes are robust with regard to whether bidders have private affiliated or common values for the object milgrom and weber 1982 myerson 1981 riley and samuelson 1981 and to whether the reserve price conveys a signal of the object s value to buyers cai riley and ye 2007 as is intuitive in this class of exogenous entry models a higher reserve price discourages entry of marginal bidders decreases the likelihood the object is sold and increases winning payments conditional on sale theoretical predictions on reserve price impacts are less clear cut in endogenous entry models levin and smith 1994 tan and yilankaya 2006 analogous to exogenous entry models a higher reserve price discourages entry of both potential and actual bidders and decreases the probability of sale however a higher reserve price might decrease winning payments through its adverse impact on entry

the bidder exclusion effect we introduce a new simple to compute test of independence of valuations and the number of bidders for ascending button auctions with symmetric conditionally independent private values the test involves estimating the expected revenue drop from excluding a bidder at random which can be computed as a scaled sample average of a difference of order statistics this object also provides a bound on counterfactual revenue changes from optimal reserve pricing or bidder mergers we illustrate the approach using data from timber auctions where we find some evidence that bidder valuations and the number of participants are not independent

multi dimensional reference dependent preferences in sealed bid auctions how most laboratory experiments differ from the field abstract we study bidding behavior in first and second price sealed bid auctions with loss averse agents our model predicts overbidding in first price induced value auctions consistent with evidence from most laboratory experiments substantially different bidding behavior could result in commodity auctions where money and auction item are consumed along different dimensions of the consumption space differences also result in second price auctions our study thereby indicates that transferring qualitative behavioral findings from induced value laboratory experiments to the field may be problematic if subjects are loss averse