Structural econometrics of first-price auctions: A survey of methods

Isabelle Perrigne, Quang Vuong

    Research output: Contribution to journalArticle

    Abstract

    Over the past decade, the structural analysis of auction data has attracted considerable attention. The structural approach relies on the hypothesis that observed bids are the equilibrium bids of the game-theoretic auction model under consideration. In this paper, we survey econometric methods that have been recently developed for estimating first-price auction models within the private value paradigm. In particular, we focus on two important issues. A first question is to know whether the structural elements of the model, mainly the underlying latent distribution of bidders private values, are identifiable from observations, usually the observed bids. A second issue concerns the estimation of the underlying density. This can be performed through different methods ranging from parametric to nonparametric ones. After a brief review of basic auction models, we first consider the simple first-price auction model within the symmetric independent private value paradigm with a nonbinding reserve price. In a second part, more advanced models are considered allowing for a binding reserve price, affiliation among private values, and asymmetry among bidders. The conclusion presents some future lines of research.

    Original languageEnglish (US)
    Pages (from-to)203-223
    Number of pages21
    JournalCanadian Journal of Agricultural Economics
    Volume47
    Issue number3
    StatePublished - 1999

    Fingerprint

    auctions
    econometrics
    Structural Models
    methodology
    Theoretical Models
    structural analysis
    method
    price
    Surveys and Questionnaires
    First-price auction
    Structural econometrics
    asymmetry
    Research
    Auctions
    Private values
    Bid

    ASJC Scopus subject areas

    • Agricultural and Biological Sciences (miscellaneous)

    Cite this

    Structural econometrics of first-price auctions : A survey of methods. / Perrigne, Isabelle; Vuong, Quang.

    In: Canadian Journal of Agricultural Economics, Vol. 47, No. 3, 1999, p. 203-223.

    Research output: Contribution to journalArticle

    Perrigne, Isabelle ; Vuong, Quang. / Structural econometrics of first-price auctions : A survey of methods. In: Canadian Journal of Agricultural Economics. 1999 ; Vol. 47, No. 3. pp. 203-223.
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