English, Article, Journal or magazine article edition: Are Structural Estimates of Auction Models Reasonable? Evidence from Experimental Data Patrick Bajari; Ali Hortacsu

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Bookmark: http://trove.nla.gov.au/version/142769
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Are Structural Estimates of Auction Models Reasonable? Evidence from Experimental Data
Author
  • Patrick Bajari
  • Ali Hortacsu
Physical Description
  • preprint
Notes
  • Recently, economists have developed methods for structural estimation of auction models. Many researchers object to these methods because they find the rationality assumptions used in these models to be implausible. In this paper, we explore whether structural auction models can generate reasonable estimates of bidders' private information. Using bid data from auction experiments, we estimate four alternative structural models of bidding in first-price sealed-bid auctions: 1) risk neutral Bayes-Nash, 2) risk averse Bayes-Nash, 3) a model of learning and 4) a quantal response model of bidding. For each model, we compare the estimated valuations and the valuations assigned to bidders in the experiments. We find that a slight modification of Guerre, Perrigne and Vuong's (2000) procedure for estimating the risk neutral Bayes-Nash model to allow for bidder asymmetries generates quite reasonable estimates of the structural parameters.
  • RePEc:nbr:nberwo:9889
  • February 2003 Recently, economists have developed methods for structural estimation of auction models. Many researchers object to these methods because they find the rationality assumptions used in these models to be implausible. In this paper, we explore whether structural auction models can generate reasonable estimates of bidders’ private information. Using bid data from auction experiments, we estimate four alternative structural models of bidding in first-price sealed-bid auctions: 1) risk neutral Bayes-Nash, 2) risk averse Bayes-Nash, 3) a model of learning and 4) a quantal response model of bidding. For each model, we compare the estimated valuations and the valuations assigned to bidders in the experiments. We find that a slight modification of Guerre, Perrigne and Vuong’s (2000) procedure for estimating the risk neutral Bayes-Nash model to allow for bidder asymmetries generates quite reasonable estimates of the structural parameters. Working Papers Index
  • RePEc:wop:stanec:03002
Language
  • English
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