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$1,000 (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.
Koh, Winston T. H.; Mariano, Roberto S.; and TSE, Yiu Kuen.
Open Versus Sealed-Bid Auctions: Testing for Revenue Equivalence under Singapore's Vehicle Quota System. (2003). Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/681
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