Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions

Arbeitspapier

We study entry and bidding patterns in sealed bid and open auctions with heterogeneous bidders. Using data from U.S. Forest Service timber auctions, we document a set of systematic effects of auction format: sealed bid auctions attract more small bidders, shift the allocation towards these bidders, and can also generate higher revenue. We propose a model, which extends the theory of private value auctions with heterogeneous bidders to capture participation decisions, that can account for these qualitative effects of auction format. We then calibrate the model using parameters estimated from the data and show that the model can explain the quantitative effects as well. Finally, we use the model to provide an assessment of bidder competitiveness, which has important consequences for auction choice.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 142.2004

Classification and Topics

• Classification: Wirtschaft ; Renewable Resources and Conservation: Forestry ; Auctions
• Subject: Auctions ; Timber ; Auktionstheorie ; Auktion ; Holzmarkt ; Schätzung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Levin, Jonathan ; Athey, Susan ; Seira, Enrique
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/118018
• Last update: 10.03.2025, 11:43 AM CET