Testing for Collusion in Asymmetric First-Price Auctions
- Autores
- Gaurab, Aryal; Gabrielli, Maria Florencia
- Año de publicación
- 2013
- Idioma
- inglés
- Tipo de recurso
- artículo
- Estado
- versión publicada
- Descripción
- This paper proposes a two-step procedure to detect collusion in asymmetric first-price procurement (auctions). First, we use a reduced form test to short-list bidders whose bidding behavior is at-odds with competitive bidding. Second, we estimate the (latent) cost for these bidders under both competition and collusion setups. Since for the same bid the recovered cost must be smaller under collusion, as collusion increases the mark-up, than under competition, detecting collusion boils down to testing for first-order stochastic dominance, for which we use the classic Kolmogorov Smirnov and Wilcoxon-Mann-Whitney tests. Our bootstrap based Monte Carlo experiments for asymmetric bidders confirm that the procedure has good power to detect collusion when there is collusion. We implement the tests for highway procurement data in California and conclude that there is no evidence of collusion even though the reduced form test supports collusion. This highlights potential pitfalls of inferring collusion based only on reduced form tests.
Fil: Gaurab, Aryal. Australian National University; Australia
Fil: Gabrielli, Maria Florencia. Universidad Nacional de Cuyo. Facultad de Ciencias Económicas. Centro de Investigación Cuyo; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Mendoza; Argentina - Materia
-
Asymmetric Auctions
Collusion
Nonparametric Testing - Nivel de accesibilidad
- acceso abierto
- Condiciones de uso
- https://creativecommons.org/licenses/by-nc-nd/2.5/ar/
- Repositorio
- Institución
- Consejo Nacional de Investigaciones Científicas y Técnicas
- OAI Identificador
- oai:ri.conicet.gov.ar:11336/3602
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Testing for Collusion in Asymmetric First-Price AuctionsGaurab, AryalGabrielli, Maria FlorenciaAsymmetric AuctionsCollusionNonparametric Testinghttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5This paper proposes a two-step procedure to detect collusion in asymmetric first-price procurement (auctions). First, we use a reduced form test to short-list bidders whose bidding behavior is at-odds with competitive bidding. Second, we estimate the (latent) cost for these bidders under both competition and collusion setups. Since for the same bid the recovered cost must be smaller under collusion, as collusion increases the mark-up, than under competition, detecting collusion boils down to testing for first-order stochastic dominance, for which we use the classic Kolmogorov Smirnov and Wilcoxon-Mann-Whitney tests. Our bootstrap based Monte Carlo experiments for asymmetric bidders confirm that the procedure has good power to detect collusion when there is collusion. We implement the tests for highway procurement data in California and conclude that there is no evidence of collusion even though the reduced form test supports collusion. This highlights potential pitfalls of inferring collusion based only on reduced form tests.Fil: Gaurab, Aryal. Australian National University; AustraliaFil: Gabrielli, Maria Florencia. Universidad Nacional de Cuyo. Facultad de Ciencias Económicas. Centro de Investigación Cuyo; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Mendoza; ArgentinaElsevier2013-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/3602Gaurab, Aryal; Gabrielli, Maria Florencia; Testing for Collusion in Asymmetric First-Price Auctions; Elsevier; International Journal of Industrial Organization; 31; 1; 1-2013; 26-350167-7187enginfo:eu-repo/semantics/altIdentifier/url/http://www.sciencedirect.com/science/article/pii/S0167718712001129info:eu-repo/semantics/altIdentifier/doi/10.1016/j.ijindorg.2012.10.002info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-nd/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-03T09:58:29Zoai:ri.conicet.gov.ar:11336/3602instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-03 09:58:30.247CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse |
dc.title.none.fl_str_mv |
Testing for Collusion in Asymmetric First-Price Auctions |
title |
Testing for Collusion in Asymmetric First-Price Auctions |
spellingShingle |
Testing for Collusion in Asymmetric First-Price Auctions Gaurab, Aryal Asymmetric Auctions Collusion Nonparametric Testing |
title_short |
Testing for Collusion in Asymmetric First-Price Auctions |
title_full |
Testing for Collusion in Asymmetric First-Price Auctions |
title_fullStr |
Testing for Collusion in Asymmetric First-Price Auctions |
title_full_unstemmed |
Testing for Collusion in Asymmetric First-Price Auctions |
title_sort |
Testing for Collusion in Asymmetric First-Price Auctions |
dc.creator.none.fl_str_mv |
Gaurab, Aryal Gabrielli, Maria Florencia |
author |
Gaurab, Aryal |
author_facet |
Gaurab, Aryal Gabrielli, Maria Florencia |
author_role |
author |
author2 |
Gabrielli, Maria Florencia |
author2_role |
author |
dc.subject.none.fl_str_mv |
Asymmetric Auctions Collusion Nonparametric Testing |
topic |
Asymmetric Auctions Collusion Nonparametric Testing |
purl_subject.fl_str_mv |
https://purl.org/becyt/ford/5.2 https://purl.org/becyt/ford/5 |
dc.description.none.fl_txt_mv |
This paper proposes a two-step procedure to detect collusion in asymmetric first-price procurement (auctions). First, we use a reduced form test to short-list bidders whose bidding behavior is at-odds with competitive bidding. Second, we estimate the (latent) cost for these bidders under both competition and collusion setups. Since for the same bid the recovered cost must be smaller under collusion, as collusion increases the mark-up, than under competition, detecting collusion boils down to testing for first-order stochastic dominance, for which we use the classic Kolmogorov Smirnov and Wilcoxon-Mann-Whitney tests. Our bootstrap based Monte Carlo experiments for asymmetric bidders confirm that the procedure has good power to detect collusion when there is collusion. We implement the tests for highway procurement data in California and conclude that there is no evidence of collusion even though the reduced form test supports collusion. This highlights potential pitfalls of inferring collusion based only on reduced form tests. Fil: Gaurab, Aryal. Australian National University; Australia Fil: Gabrielli, Maria Florencia. Universidad Nacional de Cuyo. Facultad de Ciencias Económicas. Centro de Investigación Cuyo; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Mendoza; Argentina |
description |
This paper proposes a two-step procedure to detect collusion in asymmetric first-price procurement (auctions). First, we use a reduced form test to short-list bidders whose bidding behavior is at-odds with competitive bidding. Second, we estimate the (latent) cost for these bidders under both competition and collusion setups. Since for the same bid the recovered cost must be smaller under collusion, as collusion increases the mark-up, than under competition, detecting collusion boils down to testing for first-order stochastic dominance, for which we use the classic Kolmogorov Smirnov and Wilcoxon-Mann-Whitney tests. Our bootstrap based Monte Carlo experiments for asymmetric bidders confirm that the procedure has good power to detect collusion when there is collusion. We implement the tests for highway procurement data in California and conclude that there is no evidence of collusion even though the reduced form test supports collusion. This highlights potential pitfalls of inferring collusion based only on reduced form tests. |
publishDate |
2013 |
dc.date.none.fl_str_mv |
2013-01 |
dc.type.none.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion http://purl.org/coar/resource_type/c_6501 info:ar-repo/semantics/articulo |
format |
article |
status_str |
publishedVersion |
dc.identifier.none.fl_str_mv |
http://hdl.handle.net/11336/3602 Gaurab, Aryal; Gabrielli, Maria Florencia; Testing for Collusion in Asymmetric First-Price Auctions; Elsevier; International Journal of Industrial Organization; 31; 1; 1-2013; 26-35 0167-7187 |
url |
http://hdl.handle.net/11336/3602 |
identifier_str_mv |
Gaurab, Aryal; Gabrielli, Maria Florencia; Testing for Collusion in Asymmetric First-Price Auctions; Elsevier; International Journal of Industrial Organization; 31; 1; 1-2013; 26-35 0167-7187 |
dc.language.none.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
info:eu-repo/semantics/altIdentifier/url/http://www.sciencedirect.com/science/article/pii/S0167718712001129 info:eu-repo/semantics/altIdentifier/doi/10.1016/j.ijindorg.2012.10.002 |
dc.rights.none.fl_str_mv |
info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by-nc-nd/2.5/ar/ |
eu_rights_str_mv |
openAccess |
rights_invalid_str_mv |
https://creativecommons.org/licenses/by-nc-nd/2.5/ar/ |
dc.format.none.fl_str_mv |
application/pdf application/pdf |
dc.publisher.none.fl_str_mv |
Elsevier |
publisher.none.fl_str_mv |
Elsevier |
dc.source.none.fl_str_mv |
reponame:CONICET Digital (CONICET) instname:Consejo Nacional de Investigaciones Científicas y Técnicas |
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CONICET Digital (CONICET) |
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CONICET Digital (CONICET) |
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Consejo Nacional de Investigaciones Científicas y Técnicas |
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CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas |
repository.mail.fl_str_mv |
dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar |
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13.13397 |