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Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment

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  • David Grether
  • David Porter
  • Matthew Shum

Abstract

We run a large field experiment with an online company specializing in selling used automobiles via ascending auctions. We manipulate experimentally the "price grid," or the possible amounts that bidders can bid above the current standing price. Using two diverse auction sites, one in New York and one in Texas, we find that buyer and seller behavior differs strikingly across the two sites. Specifically, in Texas we find peculiar patterns of bidding among a small but prominent group of buyers suggesting that they are "cyber-shills" working on behalf of sellers. These patterns do not appear in the New York auctions. (JEL C93, D12, D44, L62, L81)

Suggested Citation

  • David Grether & David Porter & Matthew Shum, 2015. "Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 85-103, August.
    • Handle: RePEc:aea:aejmic:v:7:y:2015:i:3:p:85-103
    Note: DOI: 10.1257/mic.20120085
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Peter Csoka & P. Jean-Jacques Herings, 2022. "Centralized clearing mechanisms: A programming approach," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 7(1), pages 45-69, December.
    2. Omar Al-Ubaydli & John A. List, 2016. "Field Experiments in Markets," NBER Working Papers 22113, National Bureau of Economic Research, Inc.
    3. Lim, Wooyoung & Xiong, Siyang, 2021. "Does jump bidding increase sellers’ revenue? Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 84-110.
    4. Ingebretsen Carlson, Jim & Wu, Tingting, 2022. "Shill bidding and information in eBay auctions: A Laboratory study," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 341-360.
    5. David Ettinger & Fabio Michelucci, 2016. "Creating a winner’s curse via jump bids," Review of Economic Design, Springer;Society for Economic Design, vol. 20(3), pages 173-186, September.
    6. Ingebretsen Carlson, Jim & Wu, Tingting, 2018. "Shill Bidding and Information in Sequential Auctions: A Laboratory Study," Working Papers 2018:18, Lund University, Department of Economics.
    7. Delnoij, Joyce & Rezaei, Sarah & Rijt, Arnout van de, 2023. "Jump bidding does not reduce prices: Field-experimental evidence from online auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 308-325.
    8. repec:dau:papers:123456789/15048 is not listed on IDEAS
    9. Ola Andersson & Tommy Andersson, 2017. "Timing and presentation effects in sequential auctions," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 2(1), pages 39-55, December.
    10. Agranov, Marina & Yariv, Leeat, 2018. "Collusion through communication in auctions," Games and Economic Behavior, Elsevier, vol. 107(C), pages 93-108.

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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