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Cartel stability in experimental first-price sealed-bid and English auctions

Author

Listed:
  • Jeroen (J.) Hinloopen

    (University of Amsterdam; CPB)

  • Sander (A.M.) Onderstal

    (University of Amsterdam)

  • Leonard Treuren

    (University of Amsterdam)

Abstract

Using laboratory experiments, we compare the stability of bidding rings in the English auction and the first-price sealed-bid auction in a heterogeneous-value setting. In both a re-matching condition and a fixed-matching condition, we observe that biddings rings are more stable in the English auction than in the first-price sealed-bid auction. In both conditions, the first-price sealed-bid auction dominates the English auction in terms of average revenue and the revenue spread. The English auction outperforms the first-price sealed-bid auction in terms of efficiency.

Suggested Citation

  • Jeroen (J.) Hinloopen & Sander (A.M.) Onderstal & Leonard Treuren, 2019. "Cartel stability in experimental first-price sealed-bid and English auctions," Tinbergen Institute Discussion Papers 19-009/VII, Tinbergen Institute, revised 31 Jun 2020.
    • Handle: RePEc:tin:wpaper:20190009
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    Cited by:

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    More about this item

    Keywords

    Cartel stability; English auction; First-price sealed-bid auction; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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