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Published June 2002 | public
Journal Article

Collusion in private value ascending price auctions


We investigate the effects of bid improvement rules and bidder value asymmetry on bidder collusion in experimental ascending price auctions without communication. We find that the strict bid improvement rule and private values are not always sufficient to break collusion among well-motivated bidders. Collusion still occurs as long as bidder gains from collusion are high.

Additional Information

© 2002 Elsevier Science B.V. Received 5 April 2000, Revised 18 May 2001, Accepted 22 May 2001, Available online 4 April 2002. I would like to thank Tony Kwasnica, Dan Levin, Charles Plott, Roger Wilkins, the participants of the March 1999 International Symposium on New Developments in Experimental Economics (Osaka, Japan) and of the 1999 ESA annual meetings (Lake Tahoe, Nevada) for helpful discussion and suggestions. I am grateful to David Grether for suggesting significant improvements in the experimental design. My special thanks to Veronika Nemes for help in conducting experiments. Financial support by the Australian Research Council is gratefully acknowledged. All errors are my own.

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