The Effect of Shill Bidding upon Prices: Experimental Evidence

Kosmopoulou, Georgia and De Silva, Dakshina G. (2007) The Effect of Shill Bidding upon Prices: Experimental Evidence. International Journal of Industrial Organization, 25 (2). pp. 291-313.

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This paper explores, through a series of experiments, the effect of shill bidding upon revenues and prices in auctions. We study the practice of shill bidding in a common value framework. Our findings are consistent with the prediction that, if bidders are aware of the possibility of seller participation in an auction, profits will be reduced on average. We also study factors that affect bidder and seller participation decisions. Shill bidding can alleviate the problem of the winner's curse by lowering the price and it can, thus, provide benefits to bidders.

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Journal Article
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International Journal of Industrial Organization
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06 Feb 2012 16:55
Last Modified:
20 Sep 2023 00:18