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Collusion or Sniping in simultaneous ascending Auctions

Author

Listed:
  • 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.

Suggested Citation

  • Sascha Füllbrunn, 2007. "Collusion or Sniping in simultaneous ascending Auctions," FEMM Working Papers 07025, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  • Handle: RePEc:mag:wpaper:07025
    as

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    File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2007_Dateien/2007_25.pdf
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    References listed on IDEAS

    as
    1. Sandro Brusco & Giuseppe Lopomo, 2002. "Collusion via Signalling in Simultaneous Ascending Bid Auctions with Heterogeneous Objects, with and without Complementarities," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 407-436.
    2. 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.
    3. 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.
    4. Peters, Michael & Severinov, Sergei, 2006. "Internet auctions with many traders," Journal of Economic Theory, Elsevier, vol. 130(1), pages 220-245, September.
    5. 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.
    6. Ladislav Wintr, 2008. "Some Evidence On Late Bidding In Ebay Auctions," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 369-379, July.
    7. 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.
    8. Sherstyuk, Katerina, 2002. "Collusion in private value ascending price auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 177-195, June.
    9. Ockenfels, Axel & Roth, Alvin E., 2006. "Late and multiple bidding in second price Internet auctions: Theory and evidence concerning different rules for ending an auction," Games and Economic Behavior, Elsevier, vol. 55(2), pages 297-320, May.
    10. Sascha Füllbrunn & Abdolkarim Sadrieh, 2012. "Sudden Termination Auctions—An Experimental Study," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(2), pages 519-540, June.
    11. Dan Ariely & Axel Ockenfels & Alvin E. Roth, 2005. "An Experimental Analysis of Ending Rules in Internet Auctions," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 890-907, Winter.
    12. Anthony M. Kwasnica & Katerina Sherstyuk, 2007. "Collusion and Equilibrium Selection in Auctions," Economic Journal, Royal Economic Society, vol. 117(516), pages 120-145, January.
    13. 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.
    14. 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.
    15. Rasmusen Eric Bennett, 2006. "Strategic Implications of Uncertainty over One's Own Private Value in Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-22, November.
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    More about this item

    Keywords

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

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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