Econometrics and Applied Micro Seminar

We introduce and apply a new nonparametric approach to identification and inference on data from ascending auctions. We exploit variation in the number of bidders across auctions to nonparametrically identify and estimate useful bounds on seller profit and other measures of economic interest within a general model of correlated private values. Applying our methods to much-studied U.S. Forest Service timber auctions, we find evidence of correlation among values after controlling for relevant auction covariates; this correlation causes expected profit and the profit-maximizing reserve price to be substantially lower than conventional (IPV) analysis would suggest.