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Procurement Bidding in First-Price and Second Price, Sealed-Bid Auctions within the Common-Value Paradigm
Department of Economics, Uppsala University, Sweden.ORCID iD: 0000-0002-1746-7884
2002 (English)In: Computational Economics, ISSN 0927-7099, E-ISSN 1572-9974, Vol. 19, no 2, p. 227-244Article in journal (Refereed) Published
Abstract [en]

Within the common-value paradigm, I examine the magnitude of the difference in expected outcome between first-price and second-price, sealed-bid auctions. I limit myself to two empirical specifications of bidders' signals: Weibull and normal distribution. The optimal bid functions and the expected procurer's cost under both auction formats are derived. Simultions are undertaken to analyze the impact that random draws of signals have on the differences inoutcome from the two auction formats. Using estimates from structural estimation in previous empirical work on first-price auction data, where Weibull and normal distributions of signals have been applied, the hypothetical expected gain from switching from a first-price, sealed-bid auction to a second-price, sealed-bid auction mechanism is computed.

Place, publisher, year, edition, pages
Springer, 2002. Vol. 19, no 2, p. 227-244
Keywords [en]
Vickrey auction, common-value, procurement bidding
National Category
Economics
Research subject
Economics; Economics
Identifiers
URN: urn:nbn:se:oru:diva-39887DOI: 10.1023/A:1015008130780Scopus ID: 2-s2.0-84867930512OAI: oai:DiVA.org:oru-39887DiVA, id: diva2:773360
Available from: 2014-12-18 Created: 2014-12-18 Last updated: 2017-12-05Bibliographically approved

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Lunander, Anders

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