Volume : IV, Issue : VI, June - 2015

A Note on the Structural Estimation of Auctions

Neha Gupta

Abstract :

 In this paper, we outline the basic technical knowledge required to carry out structural estimation of auctions, which has been the focus of a lot recent empirical research in auctions. This is because identifying the data–generating process of valuations of potential buyers is a pre–requisite for implementing the optimal (revenue–maximizing) selling mechanism. The optimal auction format depends on bidder valuations which are random draws from distributions that are unknown to the mechanism designer / seller. However, since the equiliium bid strategy of a potential buyer is usually an increasing function of his valuation, assuming that potential buyers bid according to Bayesian–Nash equiliium bid strategies, it may be possible to estimate the latent distribution of bidder valuations using bid data from a cross–section of auctions. The estimated distribution(s) can then be used to determine the optimal selling mechanism

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

Neha Gupta A Note on the Structural Estimation of Auctions International Journal of Scientific Research, Vol : 4, Issue : 6 June 2015

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