Identifying Collusion in English Auctions

Uma Kaplan, Vadim Marmer () and Artyom Shneyerov ()

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: We develop a fully nonparametric identification framework and a test of collusion in ascending bid auctions. Assuming efficient collusion, we show that the underlying distributions of values can be identified despite collusive behaviour when there is at least one bidder outside the cartel. We propose a nonparametric estimation procedure for the distributions of values and a bootstrap test of the null hypothesis of competitive behaviour against the alternative of collusion. Our framework allows for asymmetric bidders, and the test can be performed on individual bidders. The test is applied to the Guaranteed Investment Certificate auctions conducted by US municipalities over the Internet. Despite the fact that there have been allegations of collusion in this market, our test does not detect deviations from competition. A plausible explanation of this finding is that the Internet auction design involves very limited information disclosure.

Keywords: English auctions; identification; collusion; nonparametric estimation (search for similar items in EconPapers)
JEL-codes: C14 C57 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2016-02-26, Revised 2017-07-08
New Economics Papers: this item is included in nep-com and nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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