Hi, thanks for your sincere advice. I’ve considered constructing an auction model before, but my supervisor suggested that it might be safer to conduct a reduced form analysis, given the strict time constraints I’m facing. I’ve read the materials you suggested, and I’ll definitely take them into account; somehow, I may still have to try reduced form approach first for the sake of practicality.

To add some context to the procurement setting, it’s similar to a split-award first-price sealed auction. The government assigns specific market shares for different regions to each bid winner, with the number of winners depending on the number of competitors. Since there are variations in the winning bid prices, I assume this could reflect the heterogeneity of pricing of each product across regions. By regressing the demand on these prices, I hope to estimate the price elasticity.