Estimating Auctions with Externalities: The Case of USFS Timber Auctions

46 Pages Posted: 28 Oct 2016

See all articles by Joseph Kuehn

Joseph Kuehn

California State University, East Bay - Department of Economics

Date Written: June 16, 2016

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

JEL Classification: D44, L13, L40, L73

Suggested Citation

Kuehn, Joseph, Estimating Auctions with Externalities: The Case of USFS Timber Auctions (June 16, 2016). Available at SSRN: https://ssrn.com/abstract=2860481 or http://dx.doi.org/10.2139/ssrn.2860481

Joseph Kuehn (Contact Author)

California State University, East Bay - Department of Economics ( email )

25800 Carlos Bee Blvd.
Hayward, CA 94542
United States

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