Collusion via Resale
Rodney Garratt ()
No 20/2008, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)
The English auction is susceptible to tacit collusion when post-auction inter-bidder resale is allowed. We show this by constructing equilibria where, with positive probability, one bidder wins the auction without any competition and divides the spoils by optimally reselling the good to the other bidders. These equilibria interim Pareto dominate (among bidders) the standard value-bidding equilibrium, without requiring the bidders to make any commitment on bidding behavior or post-bidding spoil-division.
Keywords: English auction; resale; collusion (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
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Journal Article: Collusion via Resale (2009)
Working Paper: Collusion Via Resale (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:202008
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