Abstract
Within the private-values paradigm, we construct a tractable empirical model of equilibrium behavior at first-price auctions when bidders’ valuations are potentially dependent, but not necessarily affiliated. We develop a test of affiliation and apply our framework to data from low-price, sealed-bid auctions held by the Department of Transportation in the State of Michigan to procure road-resurfacing services: we do not reject the hypothesis of affiliation in cost signals.
Citation
Luciano I. de Castro. Harry J. Paarsch. "Testing affiliation in private-values models of first-price auctions using grid distributions." Ann. Appl. Stat. 4 (4) 2073 - 2098, December 2010. https://doi.org/10.1214/10-AOAS344
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