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Collusion in Auctions

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  • Kenneth Hendricks
  • Robert H. Porter

Abstract

Despite substantial legal evidence of collusion in auctions, there has been very little theoretical or empirical work on this subject by economists. This survey paper discusses mechanisms that are likely to facilitate collusion in auctions, as well as methods of detecting the presence of these schemes. The principal message of this paper is that the presence and the characteristics of collusive mechanisms depend critically on the nature of the object being auctioned, and on the particular auction rules. Accordingly, empirical work should be tailored to specific cases.

Suggested Citation

  • Kenneth Hendricks & Robert H. Porter, 1989. "Collusion in Auctions," Annals of Economics and Statistics, GENES, issue 15-16, pages 217-230.
  • Handle: RePEc:adr:anecst:y:1989:i:15-16:p:217-230
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    References listed on IDEAS

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    1. McAfee, R Preston & McMillan, John, 1992. "Bidding Rings," American Economic Review, American Economic Association, vol. 82(3), pages 579-599, June.
      • McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
    2. Michael H. Riordan, 1985. "Imperfect Information and Dynamic Conjectural Variations," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 41-50, Spring.
    3. Marc S. Robinson, 1984. "Oil Lease Auctions: Reconciling Economic Theory with Practice," UCLA Economics Working Papers 292, UCLA Department of Economics.
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