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USING THE SPATIAL DISTRIBUTION OF BIDDERS TO DETECT COLLUSION IN THE MARKETPLACE: EVIDENCE FROM TIMBER AUCTIONS*
Author(s) -
Price Michael K.
Publication year - 2008
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.2008.00557.x
Subject(s) - bidding , collusion , common value auction , identification (biology) , microeconomics , space (punctuation) , econometrics , economics , business , industrial organization , computer science , ecology , biology , operating system
This study develops identification strategies utilizing spatial bidding patterns to detect possible collusion in auction markets. The identification strategy is applied to examine bidder behavior using data drawn from nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia for the period 1996–2000. Results suggest that observed patterns of behavior are inconsistent with a model of perfectly competitive bidding. Further, changes in such patterns across geographic space are remarkably consistent with patterns of decay in the transmission of knowledge reported in previous empirical work on spillovers.