Bidder Collusion at Forest Service Timber Sales
JOURNAL OF POLITICAL ECONOMY, Vol. 105, No. 4, August 1997
Posted: 24 Sep 1997
Allegations of bidder collusion at Forest Service timber sales in the Pacific Northwest were common in the 1970s. Of course, prices may be low for reasons other than collusion. We formulate an empirical model that allows for both bidder collusion and supply effects and in which we control for demand conditions. Non-cooperative behavior in which a single unit is sold (the standard auction model) is a special case: it is found to be definitively outperformed by a model of collusion. We also find that supply effects are dominated by collusion in determining the winning bids in the market.
JEL Classification: L73, D44, D82
Suggested Citation: Suggested Citation