Journal
INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION
Volume 29, Issue 1, Pages 84-96Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ijindorg.2009.06.003
Keywords
Auctions; Collusion; Laboratory experiment
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The danger of collusion presents a serious challenge for auctioneers. In this paper, we compare the collusive properties of two standard auctions, the English auction and the first-price sealed-bid auction, and a lesser-known format, the Amsterdam (second-price) auction. In the Amsterdam auction, the highest losing bidder earns a premium for stirring up the price. We study two settings: in one, all bidders can collude, and in another, only a subset is eligible. The experiments show that the Amsterdam auction triggers less collusion than the standard auctions. We compare experimental results to theoretical predictions, and provide an explanation where they differ. (C) 2009 Elsevier B.V. All rights reserved.
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