Partial Identification and Testable Restrictions in Multi-Unit Auctions

Bidders’ values in discriminatory and uniform-price auctions are not necessarily point-identified under the assumptions of equilibrium bidding and independent private values, but meaningful policy analysis can proceed from bounds on bidder values. This paper provides upper and lower bounds on the set of values that can rationalize a given distribution of bids, under the additional (and standard) assumption of non-increasing marginal values. Novel testable implications of the best response hypothesis are also provided, again under the assumption of non-increasing marginal values. ∗Duke Fuqua School of Business and Economics Department, 1 Towerview Road, Durham, NC 27708. E-mail: [email protected]. I thank an associate editor and referee for helpful comments, as well as Susan Athey, Victor Chernozhukov, Ali Hortacsu, Harry Paarsch, Isabelle Perrigne, Steven Puller, Roberto Rigobon, Tom Stoker, Quang Vuong, and seminar audiences at Berkeley, Chicago, Harvard/MIT, Northwestern Kellogg, and Penn State. This research has been supported by the National Science Foundation under Grant No. 0241468.