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Published August 10, 2017 | Submitted
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Collusion in private value ascending price auctions

Abstract

We investigate bidder collusion in one-sided ascending price auctions without communication. If bidding rules in an English-type auction allow bidders to match each other's' bids, collusion can be sustained as a Nash equilibrium of a one-shot auction game. Our earlier experiments show that in common value auctions with complete information, collusion does occur and is sustainable even when bidders cannot explicitly coordinate their strategies. In this study, we investigate the robustness of bidders' collusive behavior in private values, private information environments. We find that collusion still occurs as long as the bidders' gains from collusion are high.

Additional Information

I would like to thank Dan Levin, Charles Plott, Roger Wilkins and the participants of the March 1999 International Symposium on New Development in Experimental Economics (Osaka, Japan) for helpful discussion and suggestions. Financial support by the Australian Research Council is gratefully acknowledged. All errors are my own. Published as Sherstyuk, K. (2002). Collusion in private value ascending price auctions. Journal of economic behavior & organization, 48(2), 177-195.

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Created:
August 22, 2023
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January 13, 2024