2010/10/01 by Ali Hortaçsu, Alı Hortaçsu, David McAdams · 4 citations
Decision Sciences · Business, Management and Accounting · #Auction Theory and Applications #Consumer Market Behavior and Pricing #Supply Chain and Inventory Management
paper · doi:10.1086/657948
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.