Essays in structural parametric and semiparametric estimation of auction and agency models
Gonzalez, Raul Sergio
Doctor of Philosophy
An analysis of strategic behavior and consumer surplus in eBay auctions. This essay presents structural estimates of bidding behavior in eBay computer monitor auctions. The entry of bidders is taken as exogenous and treated as another parameter in the estimation. The source of our data is the eBay website. We verify that private values have a log normal distribution, and use our estimates to reject the use of Jump Bidding or "Snipe or War" bidding and construct structural estimates of consumer surplus. Ex-ante bidding rules, entry and private value estimation in eBay auctions. This essay measures the relation between the ex-ante bidding rules set by the seller and the bidders' entry process. With the assumption of endogenous entry we study sellers' optimal choices of bidding rules such as reserve price, use of secret reserve price, auction length and the decision to make public the characteristics of the monitors. We model the entry of bidders as a Poisson process. We keep the assumptions of independent private values and identical risk neutral bidders. Modeling entry as endogenous in the SNLLS methodology improves the estimation of the private valuation. However the difference in the coefficients' magnitude as well as in the minimized objective function value is minimal if compared with the estimation assuming exogenous entry. The use of reserve price is an effective mechanism to deter entry. Shorter auctions have fewer bidders. "Dividends and the agency cost of free cash flows" . This essay analyzes the existence of incomplete contracts (agency problem) as an alternative explanation for the documented positive relationship between dividend increase and firm value. A leading explanation for the positive market reaction surrounding the announcement of dividend increases is that dividend payments mitigate the agency conflict between managers and shareholders. One implication of this theory is that those firms whose managers are less (more) entrenched should experience a stronger (weaker) market reaction around the announcement of dividend increases. Consistent with these predictions, we find an inverse U-shape relation between the market reaction to dividend increases and the level of managerial ownership in the firm.