TY - JOUR
T1 - Bidding rings
T2 - A bargaining approach
AU - Chatterjee, Kalyan
AU - Mitra, Manipushpak
AU - Mukherjee, Conan
N1 - Publisher Copyright:
© 2016 Elsevier Inc.
PY - 2017/5
Y1 - 2017/5
N2 - We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We analyze this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring, that includes the winner and the top (r−1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, and, depending on the protocol, the remaining winners free ride either by staying alone or by colluding in pairs.
AB - We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We analyze this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring, that includes the winner and the top (r−1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, and, depending on the protocol, the remaining winners free ride either by staying alone or by colluding in pairs.
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U2 - 10.1016/j.geb.2016.03.007
DO - 10.1016/j.geb.2016.03.007
M3 - Article
AN - SCOPUS:84964329562
VL - 103
SP - 67
EP - 82
JO - Games and Economic Behavior
JF - Games and Economic Behavior
SN - 0899-8256
ER -