Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49692
Authors: 
Sefton, Martin
Zhang, Ping
Year of Publication: 
2009
Series/Report no.: 
CeDEx discussion paper series 2009-21
Abstract: 
We use laboratory experiments to compare allocation rules in uniform price divisible good auctions. 'Standard' and 'uniform' allocation rules admit different types of low-price equilibria, which are eliminated by a 'hybrid' rule. We observe little evidence of revenue differences among the allocation rules. Under all three allocation rules, prices are competitive when bidders cannot explicitly communicate, and collusive when bidders can explicitly communicate. With explicit communication we find that collusive agreements are more fragile when the gain from a unilateral deviation is larger. We also find that the standard allocation rule is particularly vulnerable to collusive equilibria.
Subjects: 
experiment
uniform price auction
multi-unit auction
divisible-good auction
allocation rule
communication
JEL: 
D44
C72
C92
Document Type: 
Working Paper

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