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

76 Pages Posted: 27 Oct 2014 Last revised: 3 Mar 2020

See all articles by Matthew L. Gentry

Matthew L. Gentry

Florida State University

Tatiana Komarova

London School of Economics & Political Science (LSE)

Pasquale Schiraldi

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

Date Written: February 14, 2020

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 (February 14, 2020). Available at SSRN: https://ssrn.com/abstract=2514995 or http://dx.doi.org/10.2139/ssrn.2514995

Matthew L. Gentry (Contact Author)

Florida State University ( email )

Tallahassee, FL 30306-2180
United States

HOME PAGE: http://www.matthewgentry.net

Tatiana Komarova

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

Houghton Street
London, WC2A 2AE
United Kingdom
+44 02078523707 (Phone)

HOME PAGE: http://personal.lse.ac.uk/komarova/

Pasquale Schiraldi

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

Houghton Street
London, WC2A 2AE
United Kingdom

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

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