Collusion or Sniping in simualtaneous ascending Auctions - A Prisoner's Dilemma
until further notice
Number of pages
SourceInternational Game Theory Review, 13, 1, (2011), pp. 75-82
Article / Letter to editor
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Financiële economie en ondernemingsfinanciering
International Game Theory Review
SubjectNON-RU research; Onderzoek niet-RU
In simultaneous ascending price auctions with heterogeneous goods Brusco and Lopomo  derive collusive equilibria, where bidders divide objects among themselves, while keeping the prices low. Considering a simultaneous ascending price auction with a fixed deadline, i.e. the hard close auction format, a prisoner's dilemma situation results and collusive equilibria do not longer exist, even for only two bidders. Hence, we introduce a further reason for sniping behavior in Hard Close auctions, i.e. to appear to collude early in the auction and to defect at the very last moment.
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