Weak cartels and collusion-proof auctions

A-Tier
Journal: Journal of Economic Theory
Year: 2018
Volume: 178
Issue: C
Pages: 398-435

Authors (3)

Che, Yeon-Koo (University of Wisconsin-Madiso...) Condorelli, Daniele (not in RePEc) Kim, Jinwoo (not in RePEc)

Score contribution per author:

1.345 = (α=2.02 / 3 authors) × 2.0x A-tier

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

Abstract

We study private value auctions in which bidders may collude without using side-payments. In our model, bidders coordinate their actions to achieve an outcome that interim-Pareto dominates the noncooperative outcome. We characterize auctions that are collusion-proof in the sense that no such coordination opportunities exist, and show that the efficient and revenue maximizing auctions are not collusion-proof unless all bidders exhibit a concave distribution of valuations. We then solve for revenue maximizing collusion-proof auctions. If distributions of valuations are symmetric and single-peaked, the optimal selling mechanism is a standard auction with a minimum bid, followed by sequential negotiation in case no bidder bids above the minimum bid.

Technical Details

RePEc Handle
repec:eee:jetheo:v:178:y:2018:i:c:p:398-435
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25