Complements and substitutes in sequential auctions: The case of water auctions

Arbeitspapier

We use data on sequential water auctions to estimate demand when units are complements or substitutes. A sequential English auction model determines the estimating structural equations. When units are complements, one bidder wins all units by paying a high price for the first unit, thus deterring others from bidding on subsequent units. When units are substitutes, different bidders win the units with positive probability, paying prices similar in magnitude, even when the same bidder wins all units. We recover individual demand consistent with this stark pattern of outcomes and confirm it is not collusive, but consistent with non-cooperative behavior. Demand estimates are biased if one ignores these features.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CSIO Working Paper ; No. 0125

Classification and Topics

• Classification: Wirtschaft ; Auctions ; Estimation: General ; Market Structure, Firm Strategy, and Market Performance: General ; Antitrust Issues and Policies: General
• Subject: Auctions ; Structural Demand Estimation ; Market Structure ; Competition ; Collusion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Donna, Javier ; Espin-Sanchez, Jose-Antonio
• Event: Veröffentlichung
• (who): Northwestern University, Center for the Study of Industrial Organization (CSIO)
• (where): Evanston, IL
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/92474
• Last update: 10.03.2025, 11:42 AM CET