Cyber-shilling in Automobile Auctions: Evidence from a Field Experiment

Authors

David Grether, California Institute of Technology, Pasadena, CA
David Porter, Chapman UniversityFollow
Matthew Shum, California Institute of Technology, Pasadena, CA

Document Type

Article

Publication Date

2015

Abstract

We run a large field experiment with an online company specializing in selling used automobiles via ascending auctions. We manipulate experimentally the "price grid," or the possible amounts that bidders can bid above the current standing price. Using two diverse auction sites, one in New York and one in Texas, we find that buyer and seller behavior differs strikingly across the two sites. Specifically, in Texas we find peculiar patterns of bidding among a small but prominent group of buyers suggesting that they are "cyber-shills" working on behalf of sellers. These patterns do not appear in the New York auctions.

Comments

This article was originally published in American Economic Journal: Microeconomics, volume 7, issue 3, in 2015. DOI: 10.1257/mic.20120085

Recommended Citation

Grether, D., Porter, D., and Shum, M. "Cyber-Shilling in Automobile Auctions: Evidence from a Field Experiment," American Economic Journal: Microeconomics: Vol. 7, No. 3, August 2015.
doi: 10.1257/mic.20120085

Peer Reviewed

1

Copyright

American Economic Association