Going Once, Going Twice, Reported!

Tinbergen Institute Discussion Paper No. 09-085/1

32 Pages Posted: 10 Oct 2009 Last revised: 15 Apr 2013

Jeroen Hinloopen

CPB Netherlands Bureau of Economic Policy Analysis; University of Amsterdam - Amsterdam School of Economics (ASE); Tinbergen Institute

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Date Written: April 5, 2013

Abstract

We experimentally examine the effectiveness of antitrust policies against bidding rings in the English auction (EN) and the first-price sealed-bid auction (FP). We consider both traditional antitrust policy (without a leniency program) and modern antitrust policy (with a leniency program). In EN, neither antitrust policy has a significant effect on cartel deterrence, cartel stability, cartel recidivism, and winning bids. In FP, traditional antitrust policy deters cartel formation, destabilizes cartels, reduces the probability that a cartel re-establishes, and reduces the average winning bid. In contrast, while a leniency program has no additional effect on cartel formation or cartel recidivism, it makes cartels more stable and reduces the winning cartel bid.

Keywords: Leniency Programs, Auctions, Cartels, Laboratory Experiments

JEL Classification: C92, D44, L41

Suggested Citation

Hinloopen, Jeroen and Onderstal, Sander, Going Once, Going Twice, Reported! (April 5, 2013). Tinbergen Institute Discussion Paper No. 09-085/1. Available at SSRN: https://ssrn.com/abstract=1486043 or http://dx.doi.org/10.2139/ssrn.1486043

Jeroen Hinloopen (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
Amsterdam, North Holland 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Sander Onderstal

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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