Replication data for: Sophisticated Bidders in Beauty-Contest Auctions
Principal Investigator(s): View help for Principal Investigator(s) Stefano Galavotti; Luigi Moretti; Paola Valbonesi
Version: View help for Version V1
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Project Citation:
Galavotti, Stefano, Moretti, Luigi, and Valbonesi, Paola. Replication data for: Sophisticated Bidders in Beauty-Contest Auctions. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114347V1
Project Description
Summary:
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We study bidding behavior by firms in beauty-contest auctions, i.e., auctions in which the winning bid is the one which gets closest to some function (average) of all submitted bids. Using a dataset on public procurement beauty-contest auctions, we show that firms' observed bidding behavior departs from equilibrium and can be predicted by a "sophistication" index, which captures the firms' capacity of bidding close to optimality in the past. We show that our empirical evidence is consistent with a Cognitive Hierarchy model of bidders' behavior. We also investigate whether and how firms learn to bid strategically through experience.
Scope of Project
JEL Classification:
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D22 Firm Behavior: Empirical Analysis
D44 Auctions
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
H57 National Government Expenditures and Related Policies: Procurement
L12 Monopoly; Monopolization Strategies
D22 Firm Behavior: Empirical Analysis
D44 Auctions
D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
H57 National Government Expenditures and Related Policies: Procurement
L12 Monopoly; Monopolization Strategies
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