A Study of the Internal Organization of a Bidding Cartel
- (pp. 724-62)
Abstract
This paper examines bidding in over 1,700 knockout auctions used by a bidding cartel (or ring) of stamp dealers in the 1990s. The knockout was conducted using a variant of the model studied by Daniel Graham, Robert Marshall, and Jean-Francois Richard (1990). Following a reduced form examination of these data, damages, induced inefficiency, and the ring's benefit from colluding are estimated using a structural model in the spirit of Emmanuel Guerre, Isabelle Perrigne, and Quang Vuong (2000). A notable finding is that nonring bidders suffered damages that were of the same order of magnitude as those of the sellers. (JEL D43, D44, L12)Citation
Asker, John. 2010. "A Study of the Internal Organization of a Bidding Cartel." American Economic Review, 100 (3): 724-62. DOI: 10.1257/aer.100.3.724Additional Materials
JEL Classification
- D43 Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
- D44 Auctions
- L12 Monopoly; Monopolization Strategies