GOING ONCE, GOING TWICE, REPORTED! CARTEL ACTIVITY AND THE EFFECTIVENESS OF LENIENCY PROGRAMS IN EXPERIMENTAL AUCTIONS
Session Auctions I
Session ChairTBA

Presenter(s) Alexander Onderstal, University of Amsterdam
Co-Author(s) J Hinloopen,
Keywords Auctions, Cartels, Laboratory Experiments and Leniency Programs
JEL Codes C92, D44

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We experimentally examine the effectiveness of leniency programs for two commonly used auctions: the first-price auction and the English auction. Our results show that leniency programs deter cartel formation and increase the cartel detection rate. However, we also find that with respect to the average winning bid, leniency programs have no effect. Although less cartels are formed when a leniency program is in place, the cartels that do form are more successful. We also observe that possible cartel detection is an effective instrument to reduce cartel activity, and that cartels are more successful in the English auction than in the first-price auction.

 
When & Where
Thu 3 Sep 2009
14:00 - 15:30
Room
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