Working papers

"Ambiguity and the Declining Price Anomaly: Estimation of a Sequential Auction Model" with Gagan Ghosh and Heng Liu.


Presented at: ESWC, ESWS, IIOC, Lund U, Stockholm School of Economics, Research Institute of Industrial Economics (IFN).


In a private value paradigm, standard theory predicts prices to be weakly increasing in sequential auctions for identical items. However, using a unique data set with over 6,500 sequences of auctions for identical train tickets, we show that prices are lower in the latter of two adjacent auctions a majority of the time. The average price decline between auctions within a sequence is 8.5 percent. We further empirically evaluate the equilibrium implications from the existing theoretical models of sequential auctions, and show that the decline in prices is likely to be caused by bidders being ambiguity averse. By studying a sequential sealed bid second-price auction model that closely resembles the institutions of our data generating process, we provide a revenue ranking result and a structural identification result. The latter enables us to quantify the theoretical revenue rankings empirically. The findings suggest that revenue increases by about 13% if the mechanism is changed from second price to first price auctions. On the other hand, if the items are sold using a uniform price auction instead of a sequence of second price auctions, then revenue declines by about 20%, which coincides with the expected revenue if all ambiguity is removed.

Work in progress

"Ambiguity Aversion and the Decreasing Price Anomaly: An Experimental Study" with Ola Andersson and Jim Ingebretsen Carlson

"Wage Compression, Human Capital and Technology" with Sofia Hernnäs and Maria Olsson.

"Nationally Televised Games and Stadium Attendance: The Case of College Football in the 1950s". [email for draft]