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Laurent LAMY (ENPC) – "A structural Approach to Control for Sample Selection From Competitive Bidding with an Application to Labor Markets" joint work with Manasa Patnam and Michael Visser
Time: 12:15 pm – 1:30 pm
Date: 08th of November 2017
Place: Room 3001.
Laurent LAMY (ENPC) – “A structural Approach to Control for Sample Selection From Competitive Bidding with an Application to Labor Markets” joint work with Manasa Patnam and Michael Visser
Abstract: This paper proposes a method to estimate the relationship between the price of a good sold at auction, and a post-auction outcome which is observed among auction winners. To account for both the endogeneity of the auction price and sample selection, we develop a control function approach based on an auction model with interdependent values. The identification of the control function relies on the non-parametric identification of the signal distributions. We apply our methodology to test whether the wages earned by cricket players influence their game-specific performances. We find that the positive correlation between wages and performance comes (almost) exclusively from the selection and endogeneity effects. Furthermore, we find some evidence that those effects are not driven solely by the winner’s private signal but also by losing bidders’ signals and especially the signal of the team that previously owned the player. This last results is additional evidence that the auction model departs from pure private values.
Marie-Laure Allain (CREST – École polytechnique), Pierre Boyer (CREST – École polytechnique) & Laurent Linnemer (CREST – ENSAE ParisTech)
Link (before 05th of November 2017)