Estimating Auctions with Externalities: The Case of USFS Timber Auctions

Kuehn, Joseph (2016): Estimating Auctions with Externalities: The Case of USFS Timber Auctions.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: auction with externalities, auction estimation, timber auctions
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L4 - Antitrust Issues and Policies > L40 - General; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L73 - Forest Products

References

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