Preferences and Performance in Simultaneous First-Price Auctions: A Structural Analysis

62 Pages Posted: 27 Oct 2014 Last revised: 24 Apr 2018

See all articles by Matthew L. Gentry

Matthew L. Gentry

London School of Economics & Political Science (LSE) - Department of Economics

Tatiana Komarova

London School of Economics & Political Science (LSE)

Pasquale Schiraldi

London School of Economics & Political Science (LSE)

Date Written: April 12, 2018

Abstract

Motivated by the empirical prevalence of simultaneous bidding across a wide range of auction markets, we develop and estimate a structural model of strategic interaction in simultaneous first-price auctions when objects are heterogeneous and bidders have preferences over combinations. We establish non-parametric identification of primi- tives in this model under standard exclusion restrictions, providing a basis for both estimation and testing of preferences over combinations. We then apply our model to data on Michigan Department of Transportation (MDOT) highway procurement auc- tions, quantifying the magnitude of cost synergies and evaluating the performance of the simultaneous first-price mechanism in the MDOT marketplace.

Keywords: Auctions, multi-object auctions, simultaneous auctions, identification, structural estimation

JEL Classification: D44, D61, C51

Suggested Citation

Gentry, Matthew L. and Komarova, Tatiana and Schiraldi, Pasquale, Preferences and Performance in Simultaneous First-Price Auctions: A Structural Analysis (April 12, 2018). Available at SSRN: https://ssrn.com/abstract=2514995 or http://dx.doi.org/10.2139/ssrn.2514995

Matthew L. Gentry (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
(+44) 020 7955 6213 (Phone)

HOME PAGE: http://econ.lse.ac.uk/staff/gentry_matthew/

Tatiana Komarova

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Pasquale Schiraldi

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://sites.google.com/view/schiraldi-pasquale/home

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