Measurement of excess bidding in auctions

This paper provides a link between the structural approach of econometrics of auctions with the stochastic frontier literature in an effort to model excess bidding behaviour. The new technique is applied to timber auction data. The results suggest that both systematic overbidding and underbidding components are important.

► We model excess bidding behaviour in structural econometric models of auctions. ► The new technique is applied to timber auction data. ► The results suggest that systematic overbidding and underbidding components are important.