Auctions with Discrete Increments: a Structural Econometric Approach Based on Dominated Strategies.

We propose a structural econometric evaluation for auctions with discrete increments. Although very common in practice, this kind of mechanism raises many theoretical difficulties. First, there are no closed form equilibriumstrategies. Thus the econometrician cannot rely on a single formula to build a model. Second, the discrete nature of the outcome complicates the inference . Our econometric model is built on the weak assumption that bidders do not play some give dominated strategies. This implies that our results remain valid for many different kinds of equilibrium concepts. The specification of our model allows the computation of a Maximum Likelihood Estimator.