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Digitized by the Internet Archive in 2011 with Funding from Boston Library Consortium Iviember Libraries
| Content Provider | Semantic Scholar |
|---|---|
| Author | Atliey, Susan Levin, Jonathan Athey, Susan |
| Copyright Year | 2011 |
| Abstract | This paper studies the bidding behavior of firms in U.S. Forest Service timber auctions in 1976-1990. When conducting timber auctions, the Forest Service pubhcly announces its estimates of the tract characteristics before the auction, and each bidder additionally has an opportimity to inspect the tract and form its own private estimates. We build a model that incorporates both differential information and the fact that bids placed in timber auctions are multidimensional. The theory predicts that bidders will strategically distort their bids based on their private information, a practice known as "skewed bidding." Using a dataset that includes both the pubUc ex ante Forest Service estimates and the ex post reahzations of the tract characteristics, we test ommodel and provide evidence that bidders do possess private information. Our results suggest that private information affects Forest Service revenue and creates aUocational inefficiency. Finally, we estabhsh that risk aversion plays an important role in bidding behavior. JEL Classification Numbers: DU, D81, D82, L73. *We are grateful to Glenn EUisonj' Sara Ellison, Phil Haile, Jerry Hausman, Paul Joskow, Bob Marshall, Wally MuUin, Whitney Newey, Mike Niccolouci, Tom Stoker and seminar participants at Alabama, Berkeley, IDEI Toulouse, MIT, Toronto, Tufts, the NSF Conference on Auctions and Infrastructure, and the NBER for helpful comments. Patrick Wang and Leigh Linden provided exceptional research assistance. We would also like to thank the numerous employees of the U.S. Forest Service and the timber industry who took time to answer our questions. Athey acknowledges financial support from NSF Grant SBR-9631760 and the Provost's Fund for Humanities and Social Sciences at MIT, as well as the hospitality and support of the Cowles Foundation for Economic Research at Yale University. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://dspace.mit.edu/bitstream/handle/1721.1/63772/informationcompe00athe.pdf?sequence=1 |
| Alternate Webpage(s) | http://dspace.mit.edu/bitstream/handle/1721.1/63772/informationcompe00athe.pdf;jsessionid=823316DA50AD022AE662945A152A8F65?sequence=1 |
| Alternate Webpage(s) | http://dspace.mit.edu/bitstream/handle/1721.1/64195/singlecrossingpr00athe.pdf?sequence=1 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
