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Rings in Auctions

An Experimental Approach

  • Angelo Artale

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 447)

Table of contents

  1. Front Matter
    Pages I-X
  2. Angelo Artale
    Pages 1-4
  3. Angelo Artale
    Pages 5-51
  4. Angelo Artale
    Pages 53-61
  5. Angelo Artale
    Pages 63-95
  6. Angelo Artale
    Pages 97-102
  7. Angelo Artale
    Pages 103-106
  8. Back Matter
    Pages 107-174

About this book

Introduction

In auctions, bidders compete with one another in their attempt to 1 purchase the goods that are up for sale • But buyer competition may be reduced or disappear when a ring of colluding bidders is present. The purpose of the participants to a ring is to eliminate buyer competition and to realize a gain over vendors. When all participants are members of the ring, this is done by purchasing the item at the reserve price and splitting the spoils (the difference between the item market value and the reserve price) among the participants. "The term ring apparently derives from the fact that in a settlement sale following the auction, members of the collusive arrangement form a circle or ring to facilitate observation of their trading behavior by the ring leader" (Cassady jr. (1967)). If the coalition members knew other players' values, the problem faced by the ring might be easily solved: the player with the highest value should submit a serious bid and the other members, on the contrary, only phony bids. However, ring participants do not usually know the values of other members. Therefore, ring members have to find out some mechanism which selects the player who has to bid seriously and, eventually, esta­ blish side payments paid to each of the losers2.

Keywords

Auktion Experimentelle Wirtschaftsforschung Game Theory Spieltheorie economics equilibrium experimental economics strategy

Authors and affiliations

  • Angelo Artale
    • 1
  1. 1.Wirtschaftspolitische AbteilungUniversity of BonnBonnGermany

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-642-59158-7
  • Copyright Information Springer-Verlag Berlin Heidelberg 1997
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Springer Book Archive
  • Print ISBN 978-3-540-61930-7
  • Online ISBN 978-3-642-59158-7
  • Series Print ISSN 0075-8442
  • Buy this book on publisher's site
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