Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment

American Economic Journal: Microeconomics 2015, 7(3): 85–103

19 Pages Posted: 20 Mar 2017

See all articles by David M. Grether

David M. Grether

California Institute of Technology

David Porter

Chapman University - Department of Business and Economics

Matthew Shum

California Institute of Technology

Date Written: March 17, 2017

Abstract

We run a large field experiment with an online company specializing in selling used automobiles via ascending auctions. We manipulate experimentally the “price grid,” or the possible amounts that bidders can bid above the current standing price. Using two diverse auction sites, one in New York and one in Texas, we find that buyer and seller behavior differs strikingly across the two sites. Specifically, in Texas we find peculiar patterns of bidding among a small but prominent group of buyers suggesting that they are “cyber-shills” working on behalf of sellers. These patterns do not appear in the New York auctions.

JEL Classification: C93, D12, D44, L62, L81

Suggested Citation

Grether, David M. and Porter, David and Shum, Matthew, Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment (March 17, 2017). American Economic Journal: Microeconomics 2015, 7(3): 85–103. Available at SSRN: https://ssrn.com/abstract=2935389

David M. Grether

California Institute of Technology ( email )

Pasadena, CA 91125
United States

David Porter

Chapman University - Department of Business and Economics ( email )

Orange, CA
United States
(714) 997-6915 (Phone)
(714) 628-2881 (Fax)

Matthew Shum (Contact Author)

California Institute of Technology ( email )

Pasadena, CA 91125
United States

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