Collision in Private Value Ascending Price Auctions

Katerina Sherstyuk

No 1063, Working Papers from California Institute of Technology, Division of the Humanities and Social Sciences

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 others' 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.

Keywords: auction experiments; tacit collusion (search for similar items in EconPapers)
Pages: 18 pages
Date: 1999-03
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Related works:
Journal Article: Collusion in private value ascending price auctions (2002)
Working Paper: Collusion in Private Value Ascending Price Auctions (1999)
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