Potential competition significantly affects the size of winning bids in Forest Service sealed-bid timber auctions and has little effect on winning bids in oral auctions. Winning sealed bids depend even more, however, on actual competition, a result suggesting collusion. This explanation is supported using an index representing the likelihood an auction was rigged. Preclusive bidding (a type of collusion) in oral auctions is indicated by a positive relationship between hauling distances and the size of winning sealed bids. Comparisons of winning-bid variances, overbids, and numbers of bidders across auction type support this explanation of oral auction prices. Copyright 1996 by Oxford University Press.
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Article provided by Oxford University Press in its journal Economic Inquiry.
Volume (Year): 34 (1996) Issue (Month): 4 (October) Pages: 730-45 Download reference. The following formats are available: HTML
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Handle: RePEc:oup:ecinqu:v:34:y:1996:i:4:p:730-45
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