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Sequential Auctions with Synergy and Affiliation across Auctions

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  • Yunmi Kong

Abstract

This paper performs a structural analysis of sequential auctions with both synergy and affiliation across auctions. I propose a flexible yet tractable sequential auction model under the private value paradigm and establish its nonparametric identification, demonstrating an intuitive and general method for disentangling synergy from affiliation. After developing an estimation procedure closely tied to the identification steps, I apply it to data on adjacent oil and gas leases that are auctioned sequentially. I assess the role played by affiliation versus synergy in the observed allocation patterns and evaluate the counterfactual policy of bundled auctions.

Suggested Citation

  • Yunmi Kong, 2021. "Sequential Auctions with Synergy and Affiliation across Auctions," Journal of Political Economy, University of Chicago Press, vol. 129(1), pages 148-181.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/711402
    DOI: 10.1086/711402
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    Cited by:

    1. Yunmi Kong, 2020. "Not knowing the competition: evidence and implications for auction design," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 840-867, September.
    2. Cappelletti, Matilde & Giuffrida, Leonardo M., 2021. "Procuring survival," ZEW Discussion Papers 21-093, ZEW - Leibniz Centre for European Economic Research.
    3. Michele Fioretti & Alessandro Iaria & Aljoscha Janssen & Robert K Perrons & Clément Mazet-Sonilhac, 2022. "Innovation Begets Innovation and Concentration: the Case of Upstream Oil & Gas in the North Sea," SciencePo Working papers hal-03791971, HAL.
    4. Fanqi Shi & Yiqing Xing, 2022. "Implementing optimal outcomes through sequential auctions," RAND Journal of Economics, RAND Corporation, vol. 53(4), pages 703-732, December.
    5. Kim, Dong-Hyuk & Ratan, Anmol, 2022. "Disentangling risk aversion and loss aversion in first-price auctions: An empirical approach," European Economic Review, Elsevier, vol. 150(C).
    6. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    7. Lamy, Laurent & Patnam, Manasa & Visser, Michael, 2023. "Distinguishing incentive from selection effects in auction-determined contracts," Journal of Econometrics, Elsevier, vol. 235(2), pages 1172-1202.
    8. Yunmi Kong & Isabelle Perrigne & Quang Vuong, 2022. "Multidimensional Auctions of Contracts: An Empirical Analysis," American Economic Review, American Economic Association, vol. 112(5), pages 1703-1736, May.
    9. Lu, Jiaxuan, 2023. "The economics of China’s between-city height competition: A regression discontinuity approach," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    10. Philip A Haile & Yuichi Kitamura, 2019. "Unobserved heterogeneity in auctions," The Econometrics Journal, Royal Economic Society, vol. 22(1), pages 1-19.
    11. Pietro Bonaldi & Mauricio Villamizar-Villegas, 2018. "An Auction-Based Test of Private Information in an Interdealer FX Market," Borradores de Economia 1049, Banco de la Republica de Colombia.
    12. Zachary Breig & Allan Hernández-Chanto & Declan Hunt, 2022. "Experimental Auctions with Securities," Discussion Papers Series 657, School of Economics, University of Queensland, Australia.
    13. Janssen, Aljoscha, 2022. "Innovation Begets Innovation and Concentration: The Case of Upstream Oil & Gas in the North Sea," Working Paper Series 1431, Research Institute of Industrial Economics.
    14. Laurent Lamy & Manasa Patnam & Michael Visser, 2023. "Distinguishing incentive from selection effects in auction-determined contracts," Post-Print hal-04382099, HAL.
    15. Bougt, Daniel & Ghosh, Gagan & Liu, Heng, 2023. "Identification of interdependent values in sequential first-price auctions," International Journal of Industrial Organization, Elsevier, vol. 91(C).
    16. Gentry, Matthew & Komarova, Tatiana & Schiraldi, Pasquale, 2023. "Preferences and performance in simultaneous first-price auctions: a structural analysis," LSE Research Online Documents on Economics 115627, London School of Economics and Political Science, LSE Library.

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