Flexible Estimation of Demand Schedules and Revenue Under Different Auction Formats

28 Pages Posted: 15 Feb 2006

See all articles by Robert Feldman

Robert Feldman

Independent

Vincent R. Reinhart

American Enterprise Institute (AEI)

Date Written: November 1995

Abstract

From 1976 to 1980, the International Monetary Fund sold by sealed-bid auctions one-fifth of its gold stock and systematically experimented with auction format. Based on data from these auctions, this paper uses nonlinear estimation techniques to estimate demand curves under the alternative formats. Demand schedules at the uniform-price auctions were steeper and to the right of those at discriminatory-price auctions, upholding the predictions of bidding theory. Moreover, it is estimated that discriminating-price auctions yielded lower revenue than uniform-price auctions; Monte Carlo simulations suggest that this latter result is both robust and statistically significant.

JEL Classification: C15, D44

Suggested Citation

Feldman, Robert and Reinhart, Vincent R., Flexible Estimation of Demand Schedules and Revenue Under Different Auction Formats (November 1995). IMF Working Paper, Vol. , pp. 1-28, 1995. Available at SSRN: https://ssrn.com/abstract=883262

Robert Feldman (Contact Author)

Independent

No Address Available

Vincent R. Reinhart

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

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