COLLUSION OR SNIPING IN SIMULTANEOUS ASCENDING AUCTIONS — A PRISONER'S DILEMMA

Sascha Füllbrunn ()

International Game Theory Review (IGTR), 2011, vol. 13, issue 01, 75-82

Abstract: In simultaneous ascending price auctions with heterogeneous goods Brusco and Lopomo [2002] derive collusive equilibria, where bidders divide objects among themselves, while keeping the prices low. Considering a simultaneous ascending price auction with a fixed deadline, i.e. the hard close auction format, a prisoner's dilemma situation results and collusive equilibria do not longer exist, even for only two bidders. Hence, we introduce a further reason for sniping behavior in Hard Close auctions, i.e. to appear to collude early in the auction and to defect at the very last moment.

Keywords: Collusion; multi unit auctions; prisoners's dilemma; Subject Classification: D44 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1142/S021919891100285X

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