Multidimensional Auctions of Contracts: An Empirical Analysis

Yunmi Kong, Isabelle Perrigne, Quang Vuong

    Research output: Contribution to journalArticlepeer-review


    In this paper, we conduct a structural analysis of multi- attribute auctions of contracts with a general allocation rule when private information is multidimensional. Upon modeling bidders' contract value that accounts for their endogenous ex post actions, we nonparametrically identify bidders' private information from their bids and estimate their joint distribution. Analyzing cash- royalty auctions of Louisiana oil leases, we find government revenue worse and development rates no better than in a cash auction with a fixed royalty in view of adverse selection and moral hazard. Our findings revise conventional wisdom on the optimality of multi- attribute auctions.

    Original languageEnglish (US)
    Pages (from-to)1703-1736
    Number of pages34
    JournalAmerican Economic Review
    Issue number5
    StatePublished - May 2022

    ASJC Scopus subject areas

    • Economics and Econometrics


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