Estimation in English auctions with unobserved heterogeneity
Corresponding Author
Daniel Quint
University of Wisconsin-Madison
Search for more papers by this authorCorresponding Author
Daniel Quint
University of Wisconsin-Madison
Search for more papers by this authorThe authors thank Danielle Labruzzo and Hannah O'Leary for capable research assistantship, and Aaron Bodoh-Creed, Joachim Freyberger, Brad Larsen, Mikkel Sølvsten, seminar participants at Johns Hopkins and Penn State, the Editor, and two anonymous referees for valuable comments. This article supplants an earlier working article, Quint (2015), “Identification in Symmetric English Auctions with Additively Separable Unobserved Heterogeneity.”
Abstract
We propose a framework for identification and estimation of a private values model with unobserved heterogeneity from bid data in English auctions, using variation in the number of bidders across auctions, and extend the framework to settings where the number of bidders is not cleanly observed in each auction. We illustrate our method on data from eBay Motors auctions. We find that unobserved heterogeneity is important, accounting for two thirds of price variation after controlling for observables, and that welfare measures would be dramatically misestimated if unobserved heterogeneity were ignored.
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