Controlling collusion in auctions: The role of ceilings and reserve prices

Prabal Roy Chowdhury ()

Economics Letters, 2008, vol. 98, issue 3, 240-246

Abstract: We examine a simple model of collusion under a single-object second-price auction. Under the appropriate parameter conditions, in particular as long as collusion is neither too easy, nor too difficult, we find that the optimal policy involves both an effective ceiling, as well as a reserve price set at the lowest bidder valuation.

Date: 2008
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Working Paper: Controlling Collusion in Auctions: The Role of Ceilings and Reserve Prices (2006)
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