Collusion Without Conspiracy: An Experimental Study of One-Sided Auctions

Katerina Sherstyuk

Experimental Economics, 1999, vol. 2, issue 1, 59-75

Abstract: The study investigates collusion-nonfacilitating features of one-sided auctions. We report the results of oral nondescending bid auction experiments in which the strict bid improvement rule was absent, and compare them with the results of sealed bid auction experiments. In the sealed bid experiments the outcomes converged to the competitive equilibrium. In the oral auctions, collusive outcomes emerged and were sustained with bidders using bid matching strategies. We conclude that oral auctions provide opportunities for tacit coordination and collusion enforcement that do not exist under the sealed bid. Therefore, the strict bid improvement rule becomes critical for breaking collusion. Copyright Kluwer Academic Publishers 1999

Keywords: auction experiments; tacit collusion (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (20)

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Working Paper: Collusion without Conspiracy: An Experimental Study of One-Sided Auctions (1998)
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DOI: 10.1023/A:1009929832148

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