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
Date Written: March 17, 2017
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: Suggested Citation