2015-056: Identification of First-Price Auctions With Biased Beliefs | Refinancing
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2015-056: Identification of First-Price Auctions With Biased Beliefs

July 31st, 2015

2015-056: Identification of First-Price Auctions With Biased Beliefs

Serafin J. Grundl and Yu Zhu. This paper exploits variation in the number of bidders to separately identify the valuation distribution and the bidders’ belief about the valuation distribution in first-price auctions with independent private values. Exploiting variation in auction volume the result is extended to environments with risk averse bidders. In an illustrative application we fail to reject the null hypothesis of correct beliefs.

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