Collusive Practices in Repeated English Auctions: Experimental Evidence on Bidding Rings

摘要

The repeated meeting of buyers at English auctions, where multiple units are sold, is a common occurrence. The art auctions at Sotheby's, Christie's, and other prestigious auction houses are attended by a regular group of institutional buyers. More mundanely, the same taxicab buyers meet at vehicle auctions for used police cars (Jon P. Nelson, 1995). Commission order buyers attend the same livestock and agricultural commodity auctions; these buyers may be agents for multiple meat processors (U.S. Department of Agriculture, Grain Inspection, Packers and Stockyards Administration, 2001). The 1946 American Tobacco antitrust case [American Tobacco Co. et al. v. United States, 328 U.S. 781 (1946)] is a well-known account of how buyers of tobacco operated to hold down the price of auctioned leaf tobacco at various sites. Buyers for the big three cigarette manufacturers had developed facilitating practices that helped them purchase raw tobacco at relatively low prices. These buyers voluntarily restricted themselves to attend the same auctions; buyers were aware of the amount of leaf and the tobacco grades available at auction sites; they had instructions from the cigarette makers on the highest bid prices they could pay; and communication among these buyers seemed evident from a coordinated practice of buying low-grade tobacco that was not used by the makers.