This paper derives comparative static implications of Nash equilibrium bidding in a mineral rights model of auctions. It then tests these implications to assess whether a model of Nash equilibrium behavior in a CV information structure characterizes eBay online computer auctions. Market data is augmented by survey data in order to determine the information structure and bidding behavior in these auctions. This external information permits joint identification of Nash bidding behavior and common values. By imposing structure on the measurement error in my survey data, I am able to estimate the extent of the winners curse in these markets and the effect of dispersion and reputation on prices. My estimates show that the strength of sellers incentives to provide detailed information in their auction descriptions varies. Sellers with good reputations have powerful incentives to reduce uncertainty and promote efficient trade. These results are...

This paper argues that the answers to interesting questions about real auctions depend, often critically, on the particular mathematical assumptions that go into a model of an auction situation. It then suggests some understudied areas for fruitful mathematical research on competitive bidding. These include asymmetry, financially constrained bidders, complicated information structures, bidder decisions about auction participation, the effect of repeated auctions involving the same participants, auctioning items with interrelated values, and transaction costs. The paper also discusses two major areas where new, complicated auctions are being designed---combinatorial spectrum auctions and electricity and transmission rights auctions.

Do bidders behave as auction theory predicts they should? How do bidders (and thus, prices) react to di¤erent types of information? This paper derives implications of auction theory with respect to the dispersion of private information signals in an auction. I conduct a survey of non-bidders to construct a measure of information dispersion that is independent of bidding data. This permits joint tests of Bayesian-Nash equilibrium bidder behavior and information structure (common vs. private value) in a sample of eBay auctions for computers. The measure also allows me to separately estimate the price e¤ects of seller reputation and product information. eBay prices appear consistent with Bayesian-Nash common value bidding behavior. Uncertainty about the value of goods due to information dispersed over auction participants plays a larger role than uncertainty about the trustworthiness of the sellers, but both are significant drivers of price. Thus, seller reputation complements, rather than substitutes for, information provided in the auction descriptions by lending credibility to that information, creating an incentive for sellers to reduce uncertainty in their auctions.