Auctions and corruption: An analysis of bid rigging by a corrupt auctioneer

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2010
Volume: 34
Issue: 10
Pages: 1872-1892

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In many auctions, the auctioneer is an agent of the seller. This invites corruption. We analyze a model in which the auctioneer orchestrates bid rigging by inviting a bidder to either lower or raise his bid, whichever is more profitable. The interplay between these two types of corruption gives rise to a complex bidding problem that we tackle with numerical methods. Our results indicate that corruption does not only redistribute surplus away from the seller, but also distorts efficiency. We furthermore explain why both, the auctioneer and bidders, have a vested interest in maintaining corruption.

Technical Details

RePEc Handle
repec:eee:dyncon:v:34:y:2010:i:10:p:1872-1892
Journal Field
Macro
Author Count
2
Added to Database
2026-01-25