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Bidder Collusion: Accounting for All Feasible Bidders

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  • Jean-François Richard

Abstract

The Idaho Department of Lands (IDL) sells timber from state lands bymeans of ascending bid auction. In our empirical analysis of all IDL scaleauctions from 2004 through 2015, accounting for all auction-specific feasiblebidders, we find significant evidence of bidder collusion. Given the complexityof the empirical model and the absence of analytic results, we apply the methodof simulated moments to estimate the parameters and Monte Carlo simulationsto produce standard deviations of the estimates. The loss to Idaho from thebidder collusion is estimated to be approximately $43 million over this timeperiod.

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  • Jean-François Richard, 2019. "Bidder Collusion: Accounting for All Feasible Bidders," Working Paper 6759, Department of Economics, University of Pittsburgh.
    • Handle: RePEc:pit:wpaper:6759
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    References listed on IDEAS

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    1. Baldwin, Laura H & Marshall, Robert C & Richard, Jean-Francois, 1997. "Bidder Collusion at Forest Service Timber Sales," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 657-699, August.
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    5. Marhsall, Robert C. & Marx, Leslie M., 2014. "The Economics of Collusion: Cartels and Bidding Rings," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525941, December.
    6. Susan Athey & Jonathan Levin & Enrique Seira, 2011. "Comparing open and Sealed Bid Auctions: Evidence from Timber Auctions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 207-257.
    7. Hendry, David F., 1984. "Monte carlo experimentation in econometrics," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 16, pages 937-976, Elsevier.
    8. Philip A. Haile & Elie Tamer, 2003. "Inference with an Incomplete Model of English Auctions," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 1-51, February.
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