COLLUSION FACILITATING AND COLLUSION BREAKING POWER OF SIMULTANEOUS ASCENDING AND DESCENDING PRICE AUCTIONS Academic Article

abstract

• This article demonstrates that a robust tacit collusion evolves quickly in a collusion incubator environment but is destroyed by the simultaneous descending price auction. Theories of collusionproducing behavior, along with the detail of the states on which strategies are conditioned, lead to a deeper understanding of how tacit collusion evolves and its necessary conditions. These theories explain how the descending price auction destroys the collusion. The experiments proceed by conducting simultaneous ascending price auctions in the collusion incubator. Then, once the tacit collusion developed, changing to the descending auction. The change moved prices from collusive levels to nearcompetitive levels. (JEL C71, C92, D43, D44)

authors

• Brown, Alexander

published proceedings

• ECONOMIC INQUIRY

author list (cited authors)

• Brown, A. L., Plott, C. R., & Sullivan, H. J.

citation count

• 16

complete list of authors

• Brown, Alexander L||Plott, Charles R||Sullivan, Heidi J

publication date

• July 2009

publisher

• Wiley  Publisher

published in

• ECONOMIC INQUIRY  Journal

keywords

• 38 Economics
• 3801 Applied Economics

Digital Object Identifier (DOI)

• 10.1111/j.1465-7295.2008.00153.x

start page

• 395

end page

• 424

volume

• 47

issue

• 3

URL

• http://dx.doi.org/10.1111/j.1465-7295.2008.00153.x