Comparing Competition and Collusion in Procurement Auctions: A Numerical Approach
January 2000, Revised January 2001 Collusion is a serious problem in many procurement auctions. In this research, I study a model of first price sealed bid procurement auctions with asymmetric bidders. I demonstrate that the equilibrium to the model is unique and describe three algorithms that can be used to compute the inverse equilibrium bid functions. I then use the computational algorithms to compare competitive and collusive bidding. The algorithms are useful for structural estimation of auction models and for assessing the damages from bid-rigging.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Ralph Landau Economics Building, Stanford, CA 94305-6072|
Web page: http://www-econ.stanford.edu/econ/workp/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert H. Porter & J. Douglas Zona, 1997.
"Ohio School Milk Markets: An Analysis of Bidding,"
NBER Working Papers
6037, National Bureau of Economic Research, Inc.
- Armantier, O. & Florens, J.-P. & Richard, J.-F., 1998. "Empirical Game Theoretic Models: Constrained Equilibrium & Simulation," Papers 98.498, Toulouse - GREMAQ.
- Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
- Lebrun, Bernard, 1996.
"Existence of an Equilibrium in First Price Auctions,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(3), pages 421-43, April.
- Bernard Lebrun, 1996. "Existence of an equilibrium in first price auctions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(3), pages 421-443.
- Alessandro Lizzeri & Nicola Persico, 1995. "Existence and Uniqueness of Equilibrium In First Place Auctions and War of Attrition with Affiliated Values," Discussion Papers 1120, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Cantillon, Estelle, 2008.
"The effect of bidders' asymmetries on expected revenue in auctions,"
Games and Economic Behavior,
Elsevier, vol. 62(1), pages 1-25, January.
- Estelle Cantillon, 2000. "The Effect of Bidders' Asymmetries on Expected Revenue in Auctions," Cowles Foundation Discussion Papers 1279, Cowles Foundation for Research in Economics, Yale University.
- Estelle Cantillon, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," ULB Institutional Repository 2013/9001, ULB -- Universite Libre de Bruxelles.
- Athey, Susan, 2001.
"Single Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information,"
Econometric Society, vol. 69(4), pages 861-89, July.
- Athey, S., 1997. "Sigle Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Working papers 97-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- Martin Pesendorfer, 2000. "A Study of Collusion in First-Price Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 381-411.
- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Porter, Robert H & Zona, J Douglas, 1993.
"Detection of Bid Rigging in Procurement Auctions,"
Journal of Political Economy,
University of Chicago Press, vol. 101(3), pages 518-38, June.
- Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, vol. 7(2), pages 193-220, September.
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
When requesting a correction, please mention this item's handle: RePEc:wop:stanec:00003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.