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Working Papers, Department of Economics, The Johns Hopkins University >
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http://hdl.handle.net/10419/49868
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| Title: | | Estimating first-price auctions with an unknown number of bidders: A misclassication approach  |
| Authors: | | Hu, Yingyao Shum, Matthew |
| Issue Date: | | 2007 |
| Series/Report no.: | | Working papers // the Johns Hopkins University, Department of Economics 541 |
| Abstract: | | In this paper, we consider nonparametric identification and estimation of first-price auction models when N*, the number of potential bidders, is unknown to the researcher, but observed by bidders. Exploiting results from the recent econometric literature on models with misclassification error, we develop a nonparametric procedure for recovering the distribution of bids conditional on the unknown N*. Monte Carlo results illustrate that the procedure works well in practice. We present illustrative evidence from a dataset of procurement auctions, which shows that accounting for the unobservability of N* can lead to economically meaningful differences in the estimates of bidders' profit margins. |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Papers, Department of Economics, The Johns Hopkins University
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