قیمت های مزایده، سهم بازار، و یک عامل مشترک
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|14439||2012||13 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Economic Behavior & Organization, Volume 81, Issue 1, January 2012, Pages 61–73
The primary pro-competitive justification for multiple principals to hire a common bidding agent is efficiency. The efficiency gained by doing so increases the advantage of the common bidding agent. Almost common value auction theory predicts that an advantaged bidder is able to reduce competition by credibly enhancing the ‘winner's curse’ of disadvantaged rivals. The credible threat results in disadvantaged rivals exiting the bidding process early, leaving the advantaged bidder to purchase most, if not all, units at lower prices than when rivals have common values. The results of our empirical study of a common bidding agent are consistent with this theory.
Auction owners and sellers of cattle have long been concerned that multiple principal buyers hiring a common bidding agent has adverse effects on competition and prices (USDA, GIPSA, 2000–2004).1 Competition is allegedly reduced by the reduction in the number of bidders and collusion among the principals of the common bidding agent. On the other hand, buyers claim they hire common agents to reduce agency costs and others argue that common agency enhances efficiency by reducing transactions costs in order for small to medium sized firms to be able to compete with larger rivals (Inform Economics, 2010, Koch Group, 2005 and Telser, 1985). If common agency results in efficiencies, then the principals gain a competitive advantage over their rivals. The buyers’ own defense may result in yet another anticompetitive outcome. Common value auction theory predicts that when one bidding agent is endowed with a cost advantage, the advantaged bidder will win most of the items at lower prices due to decreased competition from disadvantaged rivals (Bikhchandani, 1988, Klemperer, 1998 and Rose and Kagel, 2008).2 However, neither experimental nor empirical results support the reduced competition findings of this theory (Levin and Kagel, 2005, Rose and Levin, 2008 and Nelson, 1997). This paper provides the first empirical analysis of a common agent's impact on auction prices and the distribution of purchases among the remaining rival bidders. Our results indicate that the common bidding agent buys more units and pays significantly lower prices than independently represented bidders. These results support both the sellers’ concerns and theoretical predictions of an advantaged bidder. At the same time, available data cannot rule out the possibility that some of the observed effects may result from collusion rather than a common agent per se, a question left for future research. Moreover, our results are also consistent with enhanced efficiency as claimed by buyers. Despite such possible efficiencies, indirect evidence suggests that the use of a common agent appears to be accompanied by some loss of sellers’ welfare in our sample.
نتیجه گیری انگلیسی
The primary purpose of this study was to estimate the price impacts of a common bidding agent in a repeated common value English auction setting. We find that the common bidding agent was able to purchase roughly 74% of the market and pay approximately 8% lower prices than independent bidders. As a whole, our results support the claims from both sellers and buyers and are further supported by auction theory. Sellers claim that common agents reduced competition. Buyers claim that hiring a common agent results in efficiencies from reduced transactions costs. According to theory, efficiency gains by hiring a common agent result in asymmetric bidders in the sense that one of the bidders has a value advantage. In the presence of an advantaged bidder, almost common value auction theory predicts that the advantaged bidder is able to purchase more units at lower prices than their rivals ( Rose and Kagel, 2008, Klemperer, 1998 and Bikhchandani, 1988). From the available data, however, we cannot confirm that the collaborating principals were truly cost advantaged from hiring the common agent; on the other hand, it is unlikely that the principals would rationally engage the services of a costlier agent. Also, we were unable to separate the potential combined competitive effects of collusion and common agency, both of which are claimed to exist by sellers. Our results contradict the experimental findings of Rose and Kagel (2008) where they did not find a significant price impact due to the presence of an advantaged bidder. The results from our study affirm that experienced economic agents outside the laboratory either employ information not present in the laboratory setting or may be sophisticated enough to act in accordance with theoretical equilibrium bidding strategies. The competitive effects of mergers in common value auctions are not well understood (Froeb and Shor, 2005). Though prices at the auction were significantly below regional prices, formal estimation of the impacts of the common agency per se on the aggregate seller surplus is left for future research. From theory and supported by our results, however, there are indications of a reduction in aggregate seller welfare at the auction analyzed. (1) Common agency necessarily reduces the number of bidders (mathematical fact). (2) The reduction in bidders (increased concentration) necessarily reduces average prices according to theory and our results. (3) Industry claims that common agency leads to efficiencies. (4) Efficiencies lead to an advantaged bidder according to theory. (5) An advantaged bidder is able to pay less than disadvantaged rivals according to theory and our results. We, therefore, can conclude that it is highly unlikely that seller surplus at the auction was enhanced due the presence of the common agent. Our findings support that a new paradigm should be considered in antitrust regulation when evaluating an efficiency defense for principals hiring a common bidding agent in a common value auction setting. Classic dominant firm theory predicts that competition and welfare are enhanced as firms seek to gain a competitive advantage by employing more efficient technology or providing improved services. Empirical research has demonstrated the procompetitive effects from joint bidding arrangements in common value auctions where bidders share their signal information of their estimated valuations (Campo et al., 2003, Hendricks and Porter, 1992 and Hoffman et al., 1991). Common agents, however, do not facilitate increased information as only the common agent is present at the auction to receive a signal of the unit's value. Therefore, common agents do not improve information. Finally, it is unclear what the impact on market prices would have been if more than one common agent (advantaged bidder) were present. Theory has not addressed this contingency. If efficiencies are gained via common agency then independent rivals must either hire the incumbent common agent or hire their own to remain competitive. If hiring a common agent simultaneously reduces the principals’ transaction costs and competition, then it is not surprising that common agency is pervasive in the livestock industry today.