Bidder collusion at Forest Service timber sales

Laura H. Baldwin, Robert C. Marshall, Jean Francois Richard

Research output: Contribution to journalArticlepeer-review

144 Scopus citations

Abstract

Allegations of bidder collusion at Forest Service timber sales in the Pacific Northwest were common in the 1970s. Of course, prices may be low for reasons other than collusion. We formulate an empirical model that allows for both bidder collusion and supply effects and in which we control for demand conditions. Noncooperative behavior in which a single unit is sold (the standard auction model) is a special case: it is found to be definitively outperformed by a model of collusion. We also find that supply effects are dominated by collusion in determining the winning bids in the market.

Original languageEnglish (US)
Pages (from-to)657-699
Number of pages43
JournalJournal of Political Economy
Volume105
Issue number4
DOIs
StatePublished - Aug 1997

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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