2010/10/01 by Ali Hortaçsu, Alı Hortaçsu, David McAdams · 308 citations
Business, Management and Accounting · Decision Sciences · #Auction Theory and Applications #Auction theory #Bidding #Common value auction #Consumer Market Behavior and Pricing #Econometrics #Economics #English auction #Generalized second-price auction #Microeconomics #Proxy bid #Revenue equivalence #Supply Chain and Inventory Management #Treasury #Vickrey auction #Vickrey–Clarke–Groves auction
paper · doi:10.1086/657948
published in Journal of Political Economy 118(5), 833-865 (University of Chicago Press)
openalex publication_date 2010/10/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
We propose an estimation method to bound bidders’ marginal valuations in discriminatory auctions using individual bid-level data and apply the method to data from the Turkish Treasury auction market. Using estimated bounds on marginal values, we compute an upper bound on the inefficiency of realized allocations as well as bounds on how much additional revenue could have been realized in a counterfactual uniform price or Vickrey auction. We conclude that switching from a discriminatory auction to a uniform price or Vickrey auction would not significantly increase revenue. Moreover, such a switch would increase bidder expected surplus by at most 0.02 percent.