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Essays on structural analysis of procurement auctions

Yu, Bin
http://rave.ohiolink.edu/etdc/view?acc_num=osu1181747354

Abstract Details

2007, Doctor of Philosophy, Ohio State University, Economics.
This dissertation addresses the empirical analysis of procurements based on the auction theory, which is known as the structural-form analysis of procurement auctions. The first essay studies the empirically implementable bandwidth selection rules in the finite sample estimation of procurement auctions with heterogeneity in the project sizes. Guerre, et al (2000) (GPV) proposed a two-step nonparametric estimator. In this essay we develop an empirical bandwidth selection rule for the nonparametric estimator under the GPV specification. We also propose a conditional hazard rate based nonparametric estimator and develop its empirical bandwidth selection rule. By conducting Monte Carlo experiment, we demonstrate that when the heterogeneity of the project size exists, the proposed bandwidth selection rules produce on average much improved estimates of the unobserved cost and its distribution than the commonly adopted bandwidth selection rule. Further, the conditional hazard rate based specification is more preferred. Then we apply the conditional hazard rate based nonparametric estimator with its bandwidth selection rule to an empirical analysis of the Ohio highway procurement market. Regular or fringe firms are studied in terms of their respective markups and the project-dependent cost information structures in this market. The second essay studies the identification and estimation of procurement auction models with the endogenous entry of potential .rms. Two different procurement auction models with endogenous entry are studied. The procurement auction model with the bid-preparation cost follows froman irrevocable and nontrivial entry expense, which is incurred after a potential .rm observes its private project cost. The procurement auction model with the information-gathering cost follows from an irrevocable and nontrivial entry expense, which is incurred before a potential firm observes its private project cost. In this essay we show how each of these two auction models with the endogenous entry can be identi.ed and estimated from the data. We also establish the identification result in a broader sense: we can differentiate these two models by only using the data of observed bids. Finally, we empirically analyze the Michigan highway procurement market and use the Bayesian method to recover the project cost distribution and the entry cost distribution in this market.
Lung-fei Lee (Advisor)

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Citations

  • Yu, B. (2007). Essays on structural analysis of procurement auctions [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1181747354

    APA Style (7th edition)

  • Yu, Bin. Essays on structural analysis of procurement auctions. 2007. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1181747354.

    MLA Style (8th edition)

  • Yu, Bin. "Essays on structural analysis of procurement auctions." Doctoral dissertation, Ohio State University, 2007. http://rave.ohiolink.edu/etdc/view?acc_num=osu1181747354

    Chicago Manual of Style (17th edition)

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© 2007, all rights reserved.
This open access ETD is published by The Ohio State University and OhioLINK.