Core-stable Rings in Auctions with Independent Private Values

Omer Biran () and Francoise Forges

No 3067, CESifo Working Paper Series from CESifo

Abstract: We propose a semi-cooperative game theoretic approach to check whether a given coalition is stable in a Bayesian game with independent private values. The ex ante expected utilities of coalitions, at an incentive compatible (noncooperative) coalitional equilibrium, describe a (cooperative) partition form game. A coalition is core-stable if the core of a suitable characteristic function, derived from the partition form game, is not empty. As an application, we study collusion in auctions in which the bidders’ final utility possibly depends on the winner’s identity. We show that such direct externalities offer a possible explanation for cartels’ structures (not) observed in practice.

Keywords: auctions; Bayesian game; collusion; core; partition function game (search for similar items in EconPapers)
JEL-codes: C71 C72 D44 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Core-stable rings in auctions with independent private values (2011)
Working Paper: Core-stable rings in auctions with independent private values (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3067

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