Working Papers

Policy-Induced Shifts in Bidding Behaviors: Insights from the Chinese Land Market (Job Market Paper)

Abstract: This paper investigates the impact of auction concentration on bidder behavior, using the case of a 2020 Chinese government policy that regulated residential land auctions in 22 cities. The policy mandates no more than three batches of auctions per year, with evenly spaced intervals and balanced auction volumes. Utilizing land auction-level data from 2019 to 2020, the analysis reveals that the policy’s effect on land prices varies by auction format. However, the policy does not significantly influence the auction failure rate. 

Presented at: CEA(2024)

Auctions vs Negotiations under Corruption: Evidence from Land Sales in China [SSRN] , with Hayri Alper Arslan and Robert Clark

Abstract: This study investigates whether corruption differentially affects contracting through auctions and negotiations. Using data on Chinese land-market transactions, where corruption is known to be present, we first show that, on average, it exerts similar effects on transactions carried out via auctions and negotiation. However, this finding masks important heterogeneity – auctions featuring healthy competition are less affected by corruption, and significantly less so than negotiation. We then develop a simple model of bidding under the possibility of corruption that rationalizes our findings.

Presented at: Centre interuniversitaire de recherche en économie quantitative Conference (CIREQ) 2023, CEA (2023), Chinese Economists Society North America Conference (2024), II0C 2024,  the Conference on Auctions, Firm Behavior, and Policy in University of Oklahoma (2024) 

Position Auctions with Organic Search, with Mehtab Hanzroh

Abstract: Recent regulatory actions, such as the FTC v. Amazon antitrust case, have raised concerns about the impact of sponsored advertisements on consumer welfare in online search platforms. While theoretical models of position auctions typically predict that sellers are ranked by consumer-match/seller-quality in equilibrium, these models often abstract from the coexistence of sponsored and organic listings. We develop a model in which sellers can appear in both sponsored and organic positions and examine how this affects equilibrium outcomes and consumer welfare. Our model captures a key tradeoff: high-quality sellers value the visibility from sponsored placement but also expect to appear prominently in organic rankings. As a result, under certain conditions, lower-quality sellers may outbid them to obtain the sponsored position - lending some support to the FTC’s concern. However, we show that this outcome only arises when all sellers are relatively high-quality, which limits potential consumer harm.