THE BIDDER EXCLUSION EFFECT

Abstract. We introduce a simple and robust approach to address several key questions in empirical auction analysis: discriminating between models of entry and quantifying the rev-enue effects of improved auction design or from bidder mergers or collusion. The approach applies in a broad range of information settings, including common values or asymmetric correlated private values, and auction formats, such as first price or ascending auctions. Furthermore, the approach does not require instruments, exogeneous variation in the num-ber of bidders, or complex estimation techniques. We demonstrate the approach using US timber and used-car auction data