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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 theoretical prediction that, if bidders are aware of the possibility of...
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Instructors can use a computerized experiment to introduce students to imperfect competition in courses on introductory … thinking in general, the experiment serves to demonstrate that profits of a firm fall as the number of competitors is increased … in a market and that firms enter profitable markets. The authors have used the experiment in undergraduate classes on …
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In the heterogeneous experimental oligopoly markets of this paper, sellers first choose capacities and then prices. In equilibrium, capacities should correspond to the Cournot prediction. In the experimental data, given capacities, observed price setting behavior is in general consistent with...
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