Open vs. sealed-bid auctions: testing for revenue equivalence under Singapore's vehicle quota system
Abstract:Using data from the auction of vehicle quota licenses in Singapore, we study if revenue equivalence holds when the auction format was switched from a sealed-bid format (May 1990 to June 2001) to an open bidding format since July 2001. Our econometric analysis indicates the change in auction format led to a change in bidding behavior. On average, the quota license premium under the open bidding format is about US$1000 (about 7.5% of the Category E license price in June 2001) lower, compared to the forecast level that would have prevailed if there had been no change in the auction format.
Document Type: Research Article
Affiliations: School of Economics and Social Sciences, Singapore Management University, 178903 Singapore
Publication date: January 1, 2007