Optimal collusion-proof auctions

A-Tier
Journal: Journal of Economic Theory
Year: 2009
Volume: 144
Issue: 2
Pages: 565-603

Authors (2)

Score contribution per author:

2.018 = (α=2.02 / 2 authors) × 2.0x A-tier

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

Abstract

We study an optimal collusion-proof auction in an environment where subsets of bidders may collude not just on their bids but also on their participation. Despite their ability to collude on participation, informational asymmetry facing the potential colluders can be exploited significantly to weaken their collusive power. The second-best auction -- i.e., the optimal auction in a collusion-free environment -- can be made collusion-proof, if at least one bidder is not collusive, or there are multiple bidding cartels, or the second-best outcome involves a non-trivial probability of the object not being sold. Regardless, optimal collusion-proof auction prescribes non-trivial exclusion of collusive bidders, i.e., a refusal to sell to any collusive bidder with positive probability.

Technical Details

RePEc Handle
repec:eee:jetheo:v:144:y:2009:i:2:p:565-603
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25