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Anonymity deters collusion in hard-close auctions: experimental evidence

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  • Sascha Fullbrunn
  • Tibor Neugebauer

Abstract

This paper studies whether collusion occurs in three-bidder three-object second-price hard-close auctions. The experimental results of two laboratory treatments are reported. The first one, the anonymity treatment, involves subject groups that can trace decisions to the bidder under conditions of anonymity. The second one, the friends treatment, involves groups of subjects who know each other. In this treatment, each bid can be identified with a person. The paper reports no collusion in the anonymity treatment but some collusion in the friends treatment.

Suggested Citation

  • Sascha Fullbrunn & Tibor Neugebauer, 2009. "Anonymity deters collusion in hard-close auctions: experimental evidence," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(2), pages 131-148.
    • Handle: RePEc:taf:nzecpp:v:43:y:2009:i:2:p:131-148
    DOI: 10.1080/00779950903005499
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    Cited by:

    1. Ping Zhang, 2009. "Characterization of Pure Strategy Equilibria in Uniform Price IPO Auctions," Discussion Papers 2009-05, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Martin Sefton & Ping Zhang, 2014. "Divisible-good uniform price auctions: The role of allocation rules and communication among bidders," Research in Experimental Economics, in: Sean M. Collins & R. Mark Isaac & Douglas A. Norton (ed.), Experiments in Financial Economics, volume 16, pages 53-86, Emerald Publishing Ltd.
    3. Sascha Füllbrunn, 2011. "Collusion Or Sniping In Simultaneous Ascending Auctions — A Prisoner'S Dilemma," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 75-82.
    4. Ping Zhang, 2009. "Characterization of Pure Strategy Equilibria in Uniform Price IPO Auctions," Discussion Papers 2009-05, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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    More about this item

    Keywords

    multi-unit auctions; collusion; experimental economics;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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