Identifying Demand in EBay Auctions

This paper presents assumptions and identification results for eBay type auctions. These results are for private value auctions covering three major issues; censoring bias, auction heterogeneity and dynamic bidding. The first section of the paper presents two identification results for second price open call auctions with private values and unobserved participation (eBay type auctions). The second section presents identification results for eBay type auctions that have either observed bidder heterogeneity, observed and unobserved item heterogeneity or unobserved auction heterogeneity. In particular it is shown that a traditional demand estimation model is identified. The third section presents identification results when bidders face an infinite sequence of eBay type auctions for a single item. ∗Thanks to Laura Hosken, Pat DeGraba, George Deltas, Luke Froeb, Marc Rysman, Mike Sandfort, Dave Schmidt, Joel Schrag, Unjy Song, Steve Tenn, Bill Vogt, Abe Wilkelgren and other FTC colleagues for helpful discussions. I would also like to thank two anonymous reviewers for the FTC working paper series. Note that this paper does not necessarily represent the views of the Commission or any individual Commissioners. All remaining errors are my own.