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Collusion or Sniping in simultaneous ascending Auctions

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  • Sascha Füllbrunn

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

In simultaneous ascending price auctions with heterogeneous goods Brusco and Lopomo (2002) derive collusive equilibria where bidders divide objects among themselves, while keeping the prices low. Considering a simultaneous ascending price auction with a fixed deadline, i.e. the Hard Close auction format, a prisoner’s dilemma situation results and collusive equilibria no longer exists, even for only two bidders. Hence, we introduce a further reason for sniping behavior in Hard Close auctions.

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File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2007_Dateien/2007_25.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 07025.

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Length: 14 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:mag:wpaper:07025

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Keywords: collusion; sniping; multi unit auctions; prisoner’s dilemma;

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References

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  1. Anwar, Sajid & McMillan, Robert & Zheng, Mingli, 2006. "Bidding behavior in competing auctions: Evidence from eBay," European Economic Review, Elsevier, vol. 50(2), pages 307-322, February.
  2. Sascha Füllbrunn & Tibor Neugebauer, 2007. "An experimental investigation of collusion in hard-close auctions: partners and friends," FEMM Working Papers 07024, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  3. Sascha Füllbrunn & Abdolkarim Sadrieh, 2012. "Sudden Termination Auctions—An Experimental Study," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(2), pages 519-540, 06.
  4. Eric B. Rasmusen, 2001. "Starategic Implications of Uncertainty Over One's Own Private Value in Auctions," CIRJE F-Series CIRJE-F-127, CIRJE, Faculty of Economics, University of Tokyo.
  5. Peters,M. & Severinov,S., 2001. "Internet auctions with many traders," Working papers 11, Wisconsin Madison - Social Systems.
  6. Axel Ockenfels & Alvin E. Roth, 2003. "Late and Multiple Bidding in Second Price Internet Auctions: Theory and Evidence Concerning Different Rules for Ending an Auction," CESifo Working Paper Series 992, CESifo Group Munich.
  7. Sherstyuk, Katerina, 2002. "Collusion in private value ascending price auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 177-195, June.
  8. Dan Ariely & Axel Ockenfels & Alvin E. Roth, 2002. "An Experimental Analysis of Ending Rules in Internet Auctions," Papers on Strategic Interaction 2002-47, Max Planck Institute of Economics, Strategic Interaction Group.
  9. Rothkopf, Michael H & Teisberg, Thomas J & Kahn, Edward P, 1990. "Why Are Vickrey Auctions Rare?," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 94-109, February.
  10. Kwasnica, Anthony M., 2000. "The choice of cooperative strategies in sealed bid auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 323-346, July.
  11. Richard Engelbrecht-Wiggans & Charles M. Kahn, 2005. "Low-Revenue Equilibria in Simultaneous Ascending-Bid Auctions," Management Science, INFORMS, vol. 51(3), pages 508-518, March.
  12. Brusco, Sandro & Lopomo, Giuseppe, 2002. "Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 407-36, April.
  13. Anthony M. Kwasnica & Katerina Sherstyuk, 2007. "Collusion and Equilibrium Selection in Auctions," Economic Journal, Royal Economic Society, vol. 117(516), pages 120-145, 01.
  14. Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
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