Strategic Overbidding in Dynamic Auctions: Structural Estimation of Value of Synergy

• 成果类型: Article
• 署名作者: Gupta, Sudip
• 署名单位: Fordham University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13282
• 发表日期: 2021
• 页码: 584-605
• 关键词: endogenous asymmetry; dynamic auction estimation; test of asymmetry; copulas; synergy creation; value of synergy

摘要

In this study, we formulate and estimate a dynamic procurement auction game where bidder asymmetry due to synergy is endogenous. The seller sells multiple goods via a sequence of first-price auctions. While bidders are ex-ante symmetric, the first-period winner has a valuation advantage as a result of such synergy in the second-period bidding game and becomes a strong bidder. This endogenous synergy creation leads to overbidding in the first-period auction relative to a static bidding game. We characterize the equilibrium in terms of the observed bid distribution and suggest a two-step estimation procedure. We apply our method to data on OCS oil-tract auctions. We find that the federal government recovers 52% of the strong buyers' willingness to pay in the second period. Bidders perceive the value of synergy to be about 5% of their first period's informational rent. Counterfactual experiments show that government revenue could have increased by about 27% under alternative selling mechanisms.