A Consistent Econometric Test for Bid Interdependence in Repeated Second-Price Auctions with Posted Prices

Andreas C. Drichoutis; Rodolfo M. Nayga, Jr; Panagiotis Lazaridis; Beom Su Park

doi:10.1007/s11293-011-9292-0

A Consistent Econometric Test for Bid Interdependence in Repeated Second-Price Auctions with Posted Prices

Andreas C. Drichoutis, Rodolfo M. Nayga, Jr, Panagiotis Lazaridis, Beom Su Park

Research output: Contribution to journal › Article

1 Citation (Scopus)

Abstract

In repeated second-price experimental auctions, the winning bid is normally posted after each round. The posting of these winning prices after each round can result in bids submitted in later rounds to be interdependent with posted prices from earlier rounds. Several approaches in the past have tried to scrutinize their experimental data for value interdependence by regressing bids on lagged market prices or lagged bids and ignoring the inherent endogeneity problem. This paper introduces a formal test for bid interdependence in repeated second-price auctions with posted prices using a dynamic panel model. We then apply this test to formally check the presence of bid interdependence in three datasets used in previous studies.

Original language	English
Pages (from-to)	329-341
Number of pages	13
Journal	Atlantic Economic Journal
Volume	39
Issue number	4
DOIs	https://doi.org/10.1007/s11293-011-9292-0
Publication status	Published - 2011 Dec 1
Externally published	Yes

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Keywords

Bid interdependence
Dynamic panel estimator
Experimental auctions
Second-price auction

ASJC Scopus subject areas

Economics, Econometrics and Finance(all)

Cite this

Drichoutis, A. C., Nayga, Jr, R. M., Lazaridis, P., & Park, B. S. (2011). A Consistent Econometric Test for Bid Interdependence in Repeated Second-Price Auctions with Posted Prices. Atlantic Economic Journal, 39(4), 329-341. https://doi.org/10.1007/s11293-011-9292-0

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10.1007/s11293-011-9292-0