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Testing for collusion in asymmetric first-price auctions

Aryal, Gaurab; Gabrielli, Maria


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...[Show more]

CollectionsANU Research Publications
Date published: 2013
Type: Journal article
Source: International Journal of Industrial Organization
DOI: 10.1016/j.ijindorg.2012.10.002


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