Non-parametric Bounds on the Winner’s Curse Effects in Auctions
نویسنده
چکیده
Sharp non-parametric bounds on the winner’s curse effects (the difference between the mean value and the mean value conditional on winning) are derived for sealed-bid auctions with affiliated values. Both firstand second-price formats are considered. In addition, sharp bounds are derived on the competitive effect, the difference between the mean value conditional on winning and the mean bid. All these bounds are identified from the distribution of bids. In the empirical illustration, I estimate them using a dataset of municipal bond auctions and compare the bounds with the point estimates of the effects obtained in a parametric model.
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