Completed Projects/ Projects Under Review:
The Impact of Public Information on Bidding, in
Highway Procurement Auctions (with Dakshina G. De Silva, Timothy Dunne and Anuruddha Kankanamge)
Abstract:
A number of papers in the theoretical auction
literature show that the release of information regarding the seller’s
valuation of an item can cause bidders to bid more aggressively. This widely
accepted result in auction theory remains largely untested in the empirical
literature. Recent theoretical work has also shown that this effect can be more
pronounced in auctions with larger common cost uncertainty. We examine the
impact of a policy change by the Oklahoma Department of Transportation that led
to the release of the state’s internal estimate of the costs to complete
highway construction projects. We perform a differences-in-differences analysis
comparing bidding in
Phantom Bidding
in Common Value Auctions
Abstract:
This
paper examines the practice of phantom bidding in an asymmetric common value
auction in which the auctioneer has a chance to observe the number of
interested bidders before he decides to place a fictitious bid. We find that
the auctioneer is worse off submitting low bids or mixing between his
participation strategies. Phantom bidding can generate benefits to the
auctioneer only if it is likely to encounter a single high bidder at the
auction and/or if the marginal effect of a single high estimate on the value of
the item is significant. In a common value environment, systematic observation
of an outlier estimate entails an atypical negative correlation in the bidders'
estimates of the value. Hence, it is more likely to encounter a single high
bidder if the number of active participants is small. In such a setting, the
informational advantage of the auctioneer can help improve his payoffs.
Sequential location and price choices in two-dimentional spatial
competition (with
Jacob dearmon).
Abstract:
This
paper examines a sequential entry game in two-dimensional space covering a
range of transportation costs for three different distributions defining
consumer locations. Firms evaluate their location and pricing choices
conditional on consumers' characteristics. As the transportation cost rises, we
observe dramatic increases in prices, profits, and a decline in social welfare.
In contrast to much of the spatial literature, the first mover does not always
appear to have an advantage over subsequent entrants; a later entrant receives
on average higher profit for a low transportation cost. As the transportation
cost continues to increase, all firms' profits are slowly eroded. Further
increases in transportation cost create spatial barriers between firms that
transform the market structure from competitive to monopolistic. Firm distance
(describing the level of product differentiation) is best characterized by a
U-shaped curve with the minimum value realized for intermediate transportation
cost.
The Effect of Information on the Bidding and Survival of Entrants in
Procurement Auctions (with Dakshina G. De Silva and Carlos Lamarche).
Abstract:
This
paper examines the impact of a policy change by the Oklahoma Department of
Transportation on the bidding patterns of entrants and incumbents, and the
survival rates of entrants in highway procurement auctions. The Department of
Transportation in
Work In
Progress:
COMPETITIVE COUPON OFFERING (WITH qIHONG lIU).
Minority
Set-Aside Projects: Firm Participation and Bidding in Highway Procurement
Auctions (with
Dakshina G. De Silva and Timothy Dunne).
Endogenous
Entry decision and bidding in procurement auctions (with Dakshina De silva and
Thomas Jeitschko).
information
acquisition in private value auctions (with Dakshina De silva and Thomas Jeitschko).