How accurately do structural asymmetric first-price auction estimates represent true valuations?

Chernomaz, K. and Yoshimoto, H. (2019) How accurately do structural asymmetric first-price auction estimates represent true valuations? Journal of Econometric Methods, (doi:10.1515/jem-2017-0001) (Early Online Publication)

Chernomaz, K. and Yoshimoto, H. (2019) How accurately do structural asymmetric first-price auction estimates represent true valuations? Journal of Econometric Methods, (doi:10.1515/jem-2017-0001) (Early Online Publication)

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Abstract

Structural asymmetric first-price auction estimation methods have provided numerous empirical studies. However, due to the latent nature of underlying valuations, the accuracy of estimates is not feasibly testable with field data, a fact that could inhibit empirical auction market designs and applications based on structural estimates. To assess their accuracy, we provide an analysis of estimates derived from experimental asymmetric auction data, in which researchers observe valuations. We test the null of statistical equivalence between the estimated and true value distributions against the alternative of non-equivalence. When advanced models are used, the Modified Kolmogorov-Smirnov test fails to reject the distributional equivalence, supporting structural asymmetric auction estimations for auction market studies. In addition, recovered efficiencies have plus-minus 2.5 percent precision, compared to the true efficiencies.

Item Type:Articles
Status:Early Online Publication
Refereed:Yes
Glasgow Author(s) Enlighten ID:Yoshimoto, Dr Hisayuki
Authors: Chernomaz, K., and Yoshimoto, H.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Econometric Methods
Publisher:De Gruyter
ISSN:2194-6345
ISSN (Online):2156-6674
Published Online:24 September 2019

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