Marmer, V., Shneyerov, A., & Xu, P. (2013). “What model for entry in first-price auctions? A nonparametric approach.” Journal of Econometrics, 176, 46-58.
We develop a selective entry model for first-price auctions that nests two polar models often estimated in the empirical literature on auctions, Levin and Smith (1994), and Samuelson (1985). The selective entry model features a pro-competitive selection effect. The selection effect is shown to be nonparametrically identifiable, and a nonparametric test for its presence is proposed. This test can be used to discriminate between the two polar models.