Published July 2009
| public
Journal Article
Collusion Facilitating and Collusion Breaking Power of Simultaneous Ascending and Descending Price Auctions
Abstract
This article demonstrates that a robust, tacit collusion evolves quickly in a "collusion incubator" environment, but is destroyed by the simultaneous, descending price auction. Theories of collusion-producing behavior, along with the detail of the states on which strategies are conditioned, lead to a deeper understanding of how tacit collusion evolves and its necessary conditions. These theories explain how the descending price auction destroys the collusion. The experiments proceed by conducting simultaneous ascending price auctions in the collusion incubator. Then, once the tacit collusion developed, changing to the descending auction. The change moved prices from collusive levels to near competitive levels.
Additional Information
© 2008 Western Economic Association International. Online Early publication July 9, 2008. The financial support of the National Science Foundation, the Caltech Laboratory for Experimental Economics and Political Science, and the Lee Center for Advanced Networking is gratefully acknowledged. The authors benefited from comments of Jin Li, Katerina Sherstyuk, Ian Krajbich, and an anonymous referee.Additional details
- Eprint ID
- 43532
- DOI
- 10.1111/j.1465-7295.2008.00153.x
- Resolver ID
- CaltechAUTHORS:20140128-105141055
- NSF
- Caltech Laboratory for Experimental Economics and Political Science
- Caltech Lee Center for Advanced Networking
- Created
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2014-01-29Created from EPrint's datestamp field
- Updated
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2021-11-10Created from EPrint's last_modified field