Simultaneous Allocation of Bundled Goods Through Auctions: Assessing the Case for Joint Bidding

34 Pages Posted: 19 Oct 2013

See all articles by Daniel Rondeau

Daniel Rondeau

University of Victoria - Department of Economics

Pascal Courty

University of Victoria; European University Institute - Economics Department (ECO); Centre for Economic Policy Research (CEPR)

Maurice Doyon

Center for Interuniversity Research and Analysis on Organization (CIRANO)

Date Written: September 18, 2013

Abstract

We use the experimental method to study the costs and benefits of allowing joint bidding in simultaneous multi-unit first price sealed bid auctions for bundled goods. The research has immediate applications to the sale of public forest stands that arbor a mixture of species. Joint bidding and communication raise the prospect of higher allocative efficiency, but also of collusive bidding through a reduction in the number of bidders and a greater scope for the formation of bidding rings. However, we find that allowing joint bidding has a significant positive impact on efficiency and reduces collusion significantly. We also explore the robustness of the results to characteristics of the auction environment that are relevant to timber auctions.

Keywords: Timber auctions, forest industry, joint bidding, bidding rings, collusion, simultaneous auction, starting price, two bidder rule

JEL Classification: Q23, Q28, D44, D47

Suggested Citation

Rondeau, Daniel and Courty, Pascal and Doyon, Maurice, Simultaneous Allocation of Bundled Goods Through Auctions: Assessing the Case for Joint Bidding (September 18, 2013). CIRANO - Scientific Publications 2013s-37, Available at SSRN: https://ssrn.com/abstract=2342294 or http://dx.doi.org/10.2139/ssrn.2342294

Daniel Rondeau (Contact Author)

University of Victoria - Department of Economics ( email )

Victoria V8W Y2Y, BC
Canada

HOME PAGE: http://web.uvic.ca/~rondeau

Pascal Courty

University of Victoria ( email )

3800 Finnerty Rd
Victoria, British Columbia V8P 5C2
Canada

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy
+39 055 4685 925 (Phone)
+39 055 4685 902 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Maurice Doyon

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal H3A 2A5, Quebec
Canada

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