Despite wide acceptance of the view that identical bids suggest the presence of a cartel agreement, there has been little analysis of the role that such bids would play. When this matter is examined, we find that except in certain extreme circumstances, identical bid arrangements are unlikely to be maintained among colluding firms where their number in an industry is small. If this conclusion is correct, the focus of past government policy on the presence of identical bids as suggesting collusive behavior in highly concentrated industries is surely misplaced.
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Volume (Year): 7 (1976) Issue (Month): 1 (Spring) Pages: 281-286 Download reference. The following formats are available: HTML
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Kenneth Hendricks & Robert Porter, 1989.
"Collusion in Auctions,"
Discussion Papers
817, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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