Optimal auctions when a seller is bound to sell to collusive bidders

Nicolas Gruyer
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Nicolas Gruyer: LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - ENAC - Ecole Nationale de l'Aviation Civile

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Abstract: I consider optimal auctions for a seller who is bound to sell a single item to one of two potential buyers, organized as " well-coordinated " cartel. I show that, even though the seller cannot deter collusion, he can optimally accommodate it by employing a simple mechanism which imposes an inefficient allocation on the bidders unless they pay a sufficiently high amount to avoid it.

Date: 2009-12
Note: View the original document on HAL open archive server: https://enac.hal.science/hal-01021568
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Published in Journal of Industrial Economics, 2009, 57 (4), pp 835-850. ⟨10.1111/j.1467-6451.2009.00397.x⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01021568

DOI: 10.1111/j.1467-6451.2009.00397.x

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