Reference no: EM133235858

A foreign government sells timber from federal lands by first price sealed bid auction. Each auction consists of a 200 acre block of timber where the winning bidder must clear cut the block within three years. In order for an auction to result in a sale at least two bidders must submit bids (if only one bidder bids then there is no sale). Also, the government sets a reserve price, which is publicly announced well in advance of the sale, for each block. The reserve price is a price below which it will not sell the timber. The reserve price is an amount R (which will differ for different auctions) if only two or three bidders submit bids. However, if four or more bidders submit bids then the reserve price is .5R. The policy of reducing the reserve price by 50% if four or more bidders submit bids is publicly announced and well known to all bidders before submitting bids. The government provides you with data for 1000 auctions which includes the reserve price R for each auction, all bids, and all bidder identities for each and every auction. The government asks to determine within 24 hours if there is evidence of bidder collusion. What analyses would you conduct?