Collusion and the Choice of Auction: An Experimental Study
نویسندگان
چکیده
We bring to the lab the theoretical result of Robinson (1985, RAND Journal of Economics 16: 141 145) that collusion is incentive compatible in the English auction (EN) and not in the firstprice sealed-bid auction (FP) in the case of one-shot interaction. Our data partly confirm Robinson’s prediction: in FP all cartels break down, but a majority of cartels breaks down in EN as well. However, more cartels form in EN than in FP and stable cartels in EN obtain the item for a price well below its value. In the case of repeated interaction, the two auctions no longer differ in terms of cartel stability but stable cartels are still better able to reduce the winning bid in EN than in FP.
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