arXiv subjects

Pasha Andreyanov

Publications and source records attributed to Pasha Andreyanov.

3 recordsLinked to original sources

arXiv2026

Reduced Forms: Feasibility, Extremality, Optimality

We study independent private values auction environments in which the auctioneer's revenue depends nonlinearly on bidders' interim winning probabilities. Our framework accommodates heterogeneity among bidders and places no ad hoc constraints on the mechanisms available to the auctioneer. Within this general setting, we show that feasibility of interim winning probabilities can be tested along a unidimensional curve -- the principal curve -- and use this insight to explicitly characterize the extreme points of the feasible set. We then combine our results on feasibility and extremality to solve for the optimal auction under a natural regularity condition. We show that the optimal mechanism allocates the good based on principal virtual values, which extend Myerson's virtual values to nonlinear settings and are constructed to equalize bidders' marginal revenue along the principal curve. We apply our approach to the classical linear model, settings with endogenous valuations due to ex ante investments, and settings with non-expected utility preferences, where previous results were largely limited either to symmetric environments with symmetric allocations or to two-bidder environments.

econ.TH↗

arXiv2024

Scoring and Favoritism in Optimal Procurement Design

We study buyer-optimal procurement mechanisms when quality is contractible. When some costs are borne by every participant of a procurement auction regardless of winning, the classic analysis should be amended. We show that an optimal symmetric mechanism is a scoring auction with a score function that may be either flatter or steeper than classically. This depends on the relative degrees of information asymmetry over the all-pay and winner-pay costs. However, the symmetry of the optimal mechanism is not granted due to the presence of all-pay costs. When ex-post efficiency is less important than the duplication of costs, favoritism becomes optimal. We show that, depending on the degree of convexity of costs, the solution takes one of two novel formats with a partially asymmetric treatment of firms, which we call a score floor and a score ceiling auction. Interestingly, these auctions feature side payments from or to the buyer, which has nothing to do with corruption.

econ.TH↗

arXiv2024

Nonparametric inference on counterfactuals in first-price auctions

In a classical model of the first-price sealed-bid auction with independent private values, we develop nonparametric estimators for several policy-relevant targets, such as the bidder's surplus and auctioneer's revenue under counterfactual reserve prices. Motivated by the linearity of these targets in the quantile function of bidders' values, we propose an estimator of the latter and derive its Bahadur-Kiefer expansion. This makes it possible to construct uniform confidence bands and test complex hypotheses about the auction design. Using the data on U.S. Forest Service timber auctions, we test whether setting zero reserve prices in these auctions was revenue maximizing.

econ.EM↗