Seminars 2008 — Abstracts

Friday, August 29

Speaker: Harry Paarsch, Melbourne

Title: Using grid distributions to test for affiliation in models of first-price auctions with private values

Abstract: Within the private-values paradigm, we construct a tractable empirical model of equilibrium behaviour at first-price auctions when bidders’ valuations are potentially dependent, but not necessarily affiliated. We develop a test of affiliation and apply our framework to data from low-price, sealed-bid auctions held by the Department of Transportation in the State of Michigan to procure road-resurfacing services: we do not reject the hypothesis of affiliation in cost signals.