Journal Article

Shared Agents and Competition in Laboratory English Auctions

Dale J. Menkhaus, Owen R. Phillips and Kalyn T. Coatney

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 85, issue 4, pages 829-839
Published in print November 2003 | ISSN: 0002-9092
Published online November 2003 | e-ISSN: 1467-8276 | DOI: https://dx.doi.org/10.1111/1467-8276.00491
Shared Agents and Competition in Laboratory English Auctions

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At livestock auctions, the same purchasing agent can represent more than one processor. Repeated multiple-unit English auctions are created in a laboratory to measure the impact of shared agents on trade prices under alternative treatments with six, and as few as two, agents representing six principals. Treatments are constructed in which the agents either know or do not know quantity for sale, and in which there are progressively fewer agents bidding. Knowledge of quantity for sale can be anticompetitive. Evolution toward increased market concentration leads to consistent anticompetitive pricing, resulting in prices significantly lower than the predicted competitive equilibrium prices.

Keywords: English auction; laboratory market; shared agents; D440; Q130

Journal Article.  6928 words.  Illustrated.

Subjects: Agricultural Economics ; Market Structure and Pricing

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