Open Versus Sealed-Bid Auctions: Testing for Revenue Equivalence Under Singapore's Vehicle Quota System

Singapore Management U. Economics and Social Sciences Working Paper No. 16-2003

21 Pages Posted: 10 Jan 2005

See all articles by Winston T.H. Koh

Winston T.H. Koh

Singapore Management University - School of Social Sciences

Roberto S. Mariano

Singapore Management University

Yiu Kuen Tse

Singapore Management University - School of Social Sciences

Date Written: August 2003

Abstract

Using data from the auction of vehicle quota licenses in Singapore, we study if revenue equivalence holds when the auction format was switched from a sealed-bid format (May 1990 to June 2001) to an open bidding format since July 2001. Our econometric analysis indicates the change in auction format led to a change in bidding behavior. On average, the quota license premium under the open bidding format is about US$1,000 (about 7.5% of the Category E license price in June 2001) lower, compared to the forecast level that would have prevailed if there had been no change in the auction format.

Keywords: Vehicle quotas, licenses, auction theory, revenue equivalence

JEL Classification: D44, D45, L91, R48

Suggested Citation

Koh, Winston T.H. and Mariano, Roberto S. and Tse, Yiu Kuen, Open Versus Sealed-Bid Auctions: Testing for Revenue Equivalence Under Singapore's Vehicle Quota System (August 2003). Singapore Management U. Economics and Social Sciences Working Paper No. 16-2003. Available at SSRN: https://ssrn.com/abstract=645521 or http://dx.doi.org/10.2139/ssrn.645521

Winston T.H. Koh (Contact Author)

Singapore Management University - School of Social Sciences ( email )

469 Bukit Timah Road
Federal Building #02-08
Singapore, 259756
Singapore
+65 6822 0853 (Phone)
+65 6822 0833 (Fax)

Roberto S. Mariano

Singapore Management University ( email )

50 Stamford Rd.
Singapore 912409, 178899
Singapore

Yiu Kuen Tse

Singapore Management University - School of Social Sciences ( email )

469 Bukit Timah Road
Federal Building #02-05
Singapore, 259756
Singapore
+65 822-0257 (Phone)
+65 822-8081 (Fax)

HOME PAGE: http://staff.mysmu.edu/yktse/yktsehp.htm

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