Collusion in Uniform-Price Auctions: Experimental Evidence and Implications for Treasury Auctions

Goswami, Gautam; Noe, Thomas H.; Rebello, Michael J.

doi:10.1093/rfs/9.3.757

Cited by 73 publications

(37 citation statements)

References 19 publications

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“…Goswami, Noe, and Rebello (1996) study the effect of nonbinding pre-play communication in a common value setting similar to ours, and our results add to their evidence on how communication affects auction performance in this important setting.…”

supporting

confidence: 76%

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Sefton¹,

Zhang²

2013

Research in Experimental Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe use laboratory experiments to compare allocation rules in uniform price divisible good auctions. "Standard" and "uniform" allocation rules admit different types of low-price equilibria, which are eliminated by a "hybrid" rule. We observe little evidence of revenue differences among the allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate, and collusive when bidders can explicitly communicate. With explicit communication we find that collusive agreements are more fragile when the gain from a unilateral deviation is larger. We also find that the standard allocation rule is particularly vulnerable to collusive equilibria.

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confidence: 76%

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Sefton¹,

Zhang²

2013

Research in Experimental Economics

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“…5 In contrast, there is a vast experimental literature on collusion in multi-unit auctions. This literature includes Goswami, Noe, and Rebello (1996), Shertsyuk (1999Shertsyuk ( , 2002, Kwasnica (2000), Levin (2001, 2005), Phillips, Menkhaus and Coatney (2003), Sade, Schnitzlein and Zender (2006), Kwasnica and Sherstyuk The remainder of this paper is organized as follows. In Section 2, we describe the theoretical background of our experiments.…”

Section: Introductionmentioning

confidence: 99%

Fighting collusion in auctions: An experimental investigation

Offerman

Onderstal

2011

International Journal of Industrial Organization

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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 …rst-price sealed-bid auction, and a lesser-known format, the Amsterdam (secondprice) 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 di¤er.

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“…In a model with perfect information, Goswami, Noe and Rebello (1996) first investigated the effe ct of allowing buyers to communicate with each other before the auction takes place. Such pre-play communication is found to depress prices in the uniform-price but not in the discriminatory-price auction, an indication that collusive behavior is more likely to emerge in the former than in the latter format.…”

Section: Introductionmentioning

confidence: 99%

Auctions for government securities: A laboratory comparison of uniform, discriminatory and Spanish designs

Abbink

Brandts

Pezanis-Christou

2006

Journal of Economic Behavior & Organization

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The Bank of Spain uses a unique auction format to sell government bonds, which can be seen as a hybrid of a uniform and a discriminatory auction. For winning bids above the average winning bid, buyers are charged the average winning bid, otherwise they pay their respective bids. We report on an experiment that compares this auction format to the discriminatory format, used in most other countries, and to the uniform format. Our design is based on a common value model with multi-unit supply and two-unit demand. The results show significantly higher revenue with the Spanish and the uniform formats than with the discriminatory one, while volatility of prices over time is significantly lower in the discriminatory format than in the Spanish and uniform cases. Actual price dispersion is significantly larger in the discriminatory than in the Spanish. Our data also exhibit the use of bid-spreading strategies in all three designs.

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Collusion in Uniform-Price Auctions: Experimental Evidence and Implications for Treasury Auctions

Cited by 73 publications

References 19 publications

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Divisible-good uniform price auctions: The role of allocation rules and communication among bidders

Fighting collusion in auctions: An experimental investigation

Auctions for government securities: A laboratory comparison of uniform, discriminatory and Spanish designs

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