Bidder collusion

Robert Clifford Marshall, Leslie M. Marx

Research output: Contribution to journalArticle

61 Citations (Scopus)

Abstract

We analyze bidder collusion at first-price and second-price auctions. Our focus is on less than all-inclusive cartels and collusive mechanisms that do not rely on auction outcomes. We show that cartels that cannot control the bids of their members can eliminate all ring competition at second-price auctions, but not at first-price auctions. At first-price auctions, when the cartel cannot control members' bids, cartel behavior involves multiple cartel bids. Cartels that can control bids of their members can suppress all ring competition at both second-price and first-price auctions; however, shill bidding reduces the profitability of collusion at first-price auctions.

Original languageEnglish (US)
Pages (from-to)374-402
Number of pages29
JournalJournal of Economic Theory
Volume133
Issue number1
DOIs
StatePublished - Mar 1 2007

Fingerprint

First-price auction
Collusion
Bid
Cartels
Cartel
Second-price auction
Profitability
Shill bidding
Auctions

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Marshall, Robert Clifford ; Marx, Leslie M. / Bidder collusion. In: Journal of Economic Theory. 2007 ; Vol. 133, No. 1. pp. 374-402.
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Bidder collusion. / Marshall, Robert Clifford; Marx, Leslie M.

In: Journal of Economic Theory, Vol. 133, No. 1, 01.03.2007, p. 374-402.

Research output: Contribution to journalArticle

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