Auctioning and bargaining: An econometric study of timber auctions with secret reservation prices

Bernar Elyakime, Jean Jacques Laffont, Patrice Loisel, Quang Vuong

    Research output: Contribution to journalArticle

    Abstract

    This article considers a first-price sealed-bid auction at which the seller’s reservation price is not announced in advance. We allow for a second round of bargaining and consider the Nash bargaining outcome when the object is unsold after the auctioning round. We characterize the bidders’ and seller’s Bayesian Nash equilibrium strategies. The distributions of the buyers’ and seller’s private values are estimated by nonlinear least squares from auction data on standing timber, while solving numerically the differential equations characterizing the seller’s and buyers’ equilibrium strategies. The performance of the estimated model is then compared to a model in which the players behave myopically.

    Original languageEnglish (US)
    Pages (from-to)209-220
    Number of pages12
    JournalJournal of Business and Economic Statistics
    Volume15
    Issue number2
    DOIs
    StatePublished - Apr 1997

    Keywords

    • Nonlinear least squares
    • Nonparametric identification
    • Numerical integration
    • Private values
    • Structural modeling

    ASJC Scopus subject areas

    • Statistics and Probability
    • Social Sciences (miscellaneous)
    • Economics and Econometrics
    • Statistics, Probability and Uncertainty

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