It’s all in the interval: an imperfect measurements approach to estimate bidders’ primitives in auctions
2014 (English)Report (Other academic)
A novel methodology to measure bidders’ costs (valuations) in descending (ascending) auctions is introduced. Based on two bounded rationality constraints bidders’ costs (valuations) are given an imperfect measurements interpretation that is robust to behavioral deviations from the traditional rationality assumptions. Theory provides no guidance as to the shape of the cost (valuation) distributions while empirical evidence suggests them to be positively skew. Consequently, a flexible distribution is employed in an imperfect measurements framework. An illustration of the proposed methodology on Swedish public procurement data is provided along with a comparison to a traditional Bayesian Nash Equilibrium methodology.
Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2014. , 21 p.
Umeå economic studies, ISSN 0348-1018 ; 899
log-generalized gamma distribution, latent variable, maximum likelihood, prediction, public procurement
Research subject Economics; Econometrics
IdentifiersURN: urn:nbn:se:umu:diva-95896OAI: oai:DiVA.org:umu-95896DiVA: diva2:761332