Estimating Auctions with Externalities: The Case of USFS Timber Auctions

Author

Joseph Kuehn

MPRA Paper from  University Library of Munich, Germany

Abstract: This paper studies how bidding strategies and auction outcomes are affected by downstream competition, particularly for USFS timber auctions. This is done by extending the auction estimation literature to a model where outside competition affects bidding behavior in that bidders are then not only concerned with whether they win the auction, but also the identity of the winner if it is not them. Applying the estimation technique to the case of timber auctions, I find that downstream competition in the lumber industry affects the bidding behavior of mill bidders, sometimes leading to the misallocation of timber tracts.

Keywords: auction with externalities; auction estimation; timber auctions (search for similar items in EconPapers)
JEL-codes: D44 L13 L40 L73 (search for similar items in EconPapers)
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Date: 2016-06
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