A Multinomial Logit Framework to Estimate Bid Shading in Procurement Auctions: Application to Cattle Sales in the Texas Panhandle

B-Tier
Journal: Review of Industrial Organization
Year: 2005
Volume: 27
Issue: 3
Pages: 253-278

Authors (2)

John Crespi (Iowa State University) Richard Sexton (not in RePEc)

Score contribution per author:

1.009 = (α=2.02 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We develop an empirical methodology based upon multinomial probability models to estimate the magnitude of bid shading in cattle procurement in the Texas Panhandle region. The methodology works well in settings where data allow a good estimation of a bidder’s probability of winning, but the approach does not rely upon the bidding process following any particular structural framework or on the existence of a control group. Estimated markdowns of price from the competitive level are in the range of 5–10% and are somewhat larger than estimates of oligopsony markdowns from previous studies of cattle procurement in the U.S. Copyright Springer 2005

Technical Details

RePEc Handle
repec:kap:revind:v:27:y:2005:i:3:p:253-278
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-25