The Bidder Exclusion Effect

NBER Working Paper No. 20523

Issued in September 2014

NBER Program(s):Industrial Organization, Technical Working Papers



We introduce a simple and robust approach to answering two key questions in empirical auction analysis: discriminating between models of entry and quantifying the revenue gains from improving auction design. The approach builds on Bulow and Klemperer (1996), connecting their theoretical results to empirical work. It applies in a broad range of information settings and auction formats without requiring instruments or estimation of a complex structural model. We demonstrate the approach using US timber and used-car auction data.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w20523

Published: Dominic Coey & Bradley Larsen & Kane Sweeney, 2019. "The bidder exclusion effect," The RAND Journal of Economics, vol 50(1), pages 93-120. citation courtesy of

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