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Assessment of collusion damages in first price auctions

Author

Listed:
  • María Florencia Gabrielli

    (CONICET. Universidad Nacional de Cuyo.)

  • Manuel Willington

    (Universidad Adolfo Ibañez)

Abstract

We propose a structural method for estimating the revenue losses associated with bidding rings in symmetric and asymmetric first-price auctions. It is based on the structural analysis of auction data and is consistent with antitrust damage assessment methodologies: we build a but-for (competitive) scenario and estimate the differences between the two scenarios. We show in a Monte Carlo exercise that our methodology performs very well in moderate size samples. We apply it to Ohio Milk Data Set analyzed by Porter and Zona [1999] and find that damages are around 7%. Damages can be assessed without any information about unaffectedmarkets.

Suggested Citation

  • María Florencia Gabrielli & Manuel Willington, 2020. "Assessment of collusion damages in first price auctions," Working Papers 5, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:5
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    Keywords

    Collusion First price auctions Damages;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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