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Collusion in Multiobject Auctions: An Experimental Evidence

Author

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  • Jindrich Matousek

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)

  • Lubomir Cingl

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)

Abstract

We experimentally examine the attributes of two complex multi-unit auction mechanisms in the presence of an opportunity to collude among bidding participants due to a provision of a simple communication channel. The results suggest that the combinatorial bidding format does not bring higher efficiency. Allowing for communication increases efficiency in both examined auction formats. Bidders are able to split the auctioned goods in a cheap-talk collusive agreement, which results in a better allocation compared to the auction formats without the communication channel. Combinatorial bidding on packages makes the decision-making problem of bidders hard to process and cause inefficiencies, especially for designs with the large number of auctioned goods.

Suggested Citation

  • Jindrich Matousek & Lubomir Cingl, 2015. "Collusion in Multiobject Auctions: An Experimental Evidence," Working Papers IES 2015/20, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2015.
    • Handle: RePEc:fau:wpaper:wp2015_20
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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5297/lang/cs
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    Cited by:

    1. Proeger, Till & Meub, Lukas & Bizer, Kilian, 2016. "The role of communication on an experimental market for tradable development rights," University of Göttingen Working Papers in Economics 271, University of Goettingen, Department of Economics.
    2. Olivier Bochet & Manshu Khanna & Simon Siegenthaler, 2021. "Beyond the Dividing Pie: Multi-Issue Bargaining in the Laboratory," Working Papers 20210070, New York University Abu Dhabi, Department of Social Science, revised Sep 2021.

    More about this item

    Keywords

    Combinatorial Auction; Communication; Collusion; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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