Measurement of collusion in open ascending price auctions in agricultural commodity markets

21 Pages Posted: 3 Dec 2020 Last revised: 26 Oct 2021

See all articles by Dipankar Das

Dipankar Das

Goa Institute of Management; BML Munjal University; School of Management

Sanjeev Kapoor

Indian Institute of Management Lucknow

Date Written: November 24, 2020

Abstract

This paper derives a method of measuring the degree of collusion among the bidders in an open ascending repetitive price auction in agricultural commodity markets in India. The paper first derives the theoretical structure of the bidders' behavior and thereafter derives a measure of collusion formation. Finally, degree of cartel has been computed using time series wholesale price data of potato and onion crops. The findings of the present research are useful for the study to link between the supply of the agriculture commodity and the degree of collusion. Using the proposed method in the present research, if the APMC measures cartel for each market and publish periodically, it will help the farmers to choose the right market to sell the produce. The farmers would select the market where the degree of collusion is relatively lower. Identification of different small cartel groups at different times with respective to the supply of the agriculture commodity would help to avoid the incidence of distress selling by farmers, which is the main hindrance in the development of farming community in India.

Keywords: Collusion, Probability distribution, Equilibrium bid prices, Auctions, Agricultural commodities.

JEL Classification: L,Q.

Suggested Citation

Das, Dipankar and Kapoor, Sanjeev, Measurement of collusion in open ascending price auctions in agricultural commodity markets (November 24, 2020). Available at SSRN: https://ssrn.com/abstract=3736887 or http://dx.doi.org/10.2139/ssrn.3736887

Dipankar Das (Contact Author)

Goa Institute of Management ( email )

Ribandar
Ribandar
Panaji, Goa 403006
India

BML Munjal University ( email )

National Highway 8
67 KM Milestone
Gurgaon
India

School of Management ( email )

National Highway 8
67 KM Milestone
Gurgaon
India

Sanjeev Kapoor

Indian Institute of Management Lucknow ( email )

Prabandh Nagar
Off. Sitapur Road, Lucknow 226013
Uttar Pradesh
India

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