When participating in an auction is costly, a potential bidder has to decide whether to enter the auction or not. The extent to which the potential bidders know their private cost before making their entry decisions determines how selective the entry process is. Endogenous selective entry is common in many auctions and it has important implications for designing auctions, in particular, choosing the bid discount policy that is frequently used in public procurements to achieve distributional goals of the government. Prior empirical studies of the bid preferences were based on frameworks that either did not explicitly model endogenous participation or assumed endogenous, but non-selective participation. This study empirically investigated whether the entry process is selective in the highway procurement auctions run by the California Department of Transportation. To this end, the asymmetric affiliated-signal model was adapted to permit endogenous selective entry. Model parameters, including entry costs and distributions of construction costs for regular and fringe companies, were estimated nonparametrically. The results show evidence favoring selective entry of the fringe firms and imply that the level of bid discount required to achieve the procurement buyer’s policy objective may be lower than what is previously found in the literature under the assumption of non-selective entry.

中文翻译：

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选择性进入公路采购拍卖

当参与拍卖的成本很高时，潜在投标人必须决定是否参加拍卖。潜在投标人在做出进入决定之前了解其私人成本的程度决定了进入过程的选择性。内生选择性进入在许多拍卖中很常见，它对设计拍卖，特别是选择公共采购中经常使用的投标折扣政策以实现政府的分配目标具有重要意义。先前对投标偏好的实证研究基于没有明确模拟内生参与或假设内生但非选择性参与的框架。本研究实证调查了加州交通部举办的高速公路采购拍卖中的进入过程是否具有选择性。为此，对不对称附属信号模型进行了调整以允许内源性选择性进入。模型参数，包括进入成本和常规和边缘公司的建设成本分布，是非参数估计的。结果显示有证据支持边缘公司的选择性进入，并暗示实现采购买方政策目标所需的投标折扣水平可能低于先前在非选择性进入假设下的文献中发现的水平。包括进入成本和常规和边缘公司的建设成本分配，是非参数估计的。结果显示有证据支持边缘公司的选择性进入，并暗示实现采购买方政策目标所需的投标折扣水平可能低于先前在非选择性进入假设下的文献中发现的水平。包括进入成本和常规和边缘公司的建设成本分配，是非参数估计的。结果显示有证据支持边缘公司的选择性进入，并暗示实现采购买方政策目标所需的投标折扣水平可能低于先前在非选择性进入假设下的文献中发现的水平。