Bidder Collusion at Forest Service Timber Sales

JOURNAL OF POLITICAL ECONOMY, Vol. 105, No. 4, August 1997

Posted: 24 Sep 1997

See all articles by Laura H. Baldwin

Laura H. Baldwin

Rand Corporation

Robert C. Marshall

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Jean-Francois Richard

University of Pittsburgh - Department of Economics

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. Non-cooperative 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.

JEL Classification: L73, D44, D82

Suggested Citation

Baldwin, Laura and Marshall, Robert C. and Richard, Jean-Francois, Bidder Collusion at Forest Service Timber Sales. JOURNAL OF POLITICAL ECONOMY, Vol. 105, No. 4, August 1997, Available at SSRN: https://ssrn.com/abstract=10906

Laura Baldwin

Rand Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States
310-393-0411 x6537 (Phone)

Robert C. Marshall (Contact Author)

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-0030 (Phone)
814-865-0013 (Fax)

Jean-Francois Richard

University of Pittsburgh - Department of Economics ( email )

4901 Wesley Posvar Hall
230 South Bouquet Street
Pittsburgh, PA 15260
United States
412-648-1750 (Phone)

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