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Estimating Revenue Under Collusion-Proof Auctions

Author

Listed:
  • Gaurab Aryal
  • Maria F. Gabrielli

Abstract

We propose a method to nonparametriclly estimate the revenue under a auction that is efficient and resilient to collusion [Chen and Micali, 2012]. Efficiency is achieved on account of a lower revenue and we propose a method to quantify this efficiency-revenue trade-off, i.e. the extra cost for which efficient allocation can be guaranteed even when bidders collude. We implement a local polynomial estimation method on sample of California highway procurements data and find that to achieve efficiency the cost of procurement must increase by at lest 10.8% and can go up to 48.8% depending on the size of bidding-ring.

Suggested Citation

  • Gaurab Aryal & Maria F. Gabrielli, 2012. "Estimating Revenue Under Collusion-Proof Auctions," ANU Working Papers in Economics and Econometrics 2012-597, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2012-597
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp597.pdf
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    Cited by:

    1. Anil Chorppath & Tansu Alpcan & Holger Boche, 2015. "Adversarial Behavior in Network Games," Dynamic Games and Applications, Springer, vol. 5(1), pages 26-64, March.
    2. Maria Florencia Gabrielli, 2023. "Detecting Collusion on Highway Procurement," Working Papers 263, Red Nacional de Investigadores en Economía (RedNIE).
    3. Florencia M. Gabrielli, 2013. "Detecting Collusion on Highway Procurement," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 127-165, January-D.

    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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