represented by the right hand side of equation (2.9a). Denote this markdown by M.
However, if bid shading is not zero, then the markdown estimated with the NEIO
approach contains the “true” markdown (M) that the NEIO model seeks to explain plus
some bid shading δj∙ (δj∙ = Σδij∕J). Denote this markdown byM~. Mathematically, the
relationship between M~ and M is:
(2.10) M = M + δj,
where M~ is the “mixed” markdown containing the “true“ markdown (M) that the NEIO
seeks to explain plus the average bid shading on J total cattle lots δj∙ (δj∙ = Σδij∕J).
Therefore, in the presence of bid shading, the industry-pricing rule represented by
equation (2.4a) can be rewritten as:
(2.11)
pr -c(Yr)-pf
'M, if δj = 0
=
M, if δj ≠ 0.
~~ ʃ . r≥,._____. ʃ
where M = pf (1 + Θ)HHI ∕εsf ,
Θ~ is a “mixed” conjectural variation when bidders bid
... ⅝ < .T .C . ʃ _
shading is not zero, δj = ∑ j=1[F(pijf )∕ f ( pijf )(Nj -1)]∕J, and M =M - δj. The
relationship between the industry conjectural variation (Θ) in M (when there is no bid
shading) and the “mixed” conjectural variation (Θ~) inM~ (when there is bid shading) can
be expressed as:
(2.12)
pf (1 + Θ)HHI
εs
1442443
M~
= pf (1 + Θ)HHI
εs
1442443
M
+δj,
which can be re-arranged to yield:
(2.12a)
~
Θ=Θ+δj
εf
εs
p f HHI
15
More intriguing information
1. The Value of Cultural Heritage Sites in Armenia: Evidence From a Travel Cost Method Study2. The name is absent
3. The name is absent
4. The name is absent
5. A Rare Presentation of Crohn's Disease
6. The resources and strategies that 10-11 year old boys use to construct masculinities in the school setting
7. IMPACTS OF EPA DAIRY WASTE REGULATIONS ON FARM PROFITABILITY
8. Quality practices, priorities and performance: an international study
9. Survey of Literature on Covered and Uncovered Interest Parities
10. On the job rotation problem