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What Model for Entry in First-Price Auctions? A Nonparametric Approach

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  • Marmer, Vadim
  • Shneyerov, Artyom
  • Xu, Pai

Abstract

We develop a nonparametric approach that allows for discrimination among alternative models of entry in first-price auctions. Three models of entry are considered: those of Levin and Smith (1994), Samuelson (1985), and a new model in which the information received at the entry stage is imperfectly correlated with bidder valuations. We derive testable restrictions of these models based on how the pro-competitive selection effect shifts bidder valuation quantiles in response to an increase in the number of potential bidders.

Suggested Citation

  • Marmer, Vadim & Shneyerov, Artyom & Xu, Pai, 2007. "What Model for Entry in First-Price Auctions? A Nonparametric Approach," Microeconomics.ca working papers marmer-07-11-22-02-26-44, Vancouver School of Economics, revised 18 Feb 2011.
    • Handle: RePEc:ubc:pmicro:marmer-07-11-22-02-26-44
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    More about this item

    Keywords

    First-price auctions; models of entry; selective entry; selection effect; nonparametric estimation; quantiles;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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