Optimal Auctions when a seller is bound to sell to collusive bidders (new version of "using lotteries ...")

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Optimal Auctions when a seller is bound to sell to collusive bidders (new version of "using lotteries ...")

Author Info

Nicolas Gruyer () (LEEA (air transport economics laboratory), ENAC)

Abstract

I consider optimal auctions for a seller who is bound to sell a single item to one of two potential buyers, organized in a `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.

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Paper provided by LEEA (air transport economics laboratory), ENAC (french national civil aviation school) in its series Economics Working Papers with number 06.

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Length: 21 pages
Date of creation: 01 Jun 2008
Date of revision:
Handle: RePEc:enc:abcdef:auction6

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Find related papers by JEL classification:
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-12-01 (All new papers)
NEP-COM-2008-12-01 (Industrial Competition)
NEP-CTA-2008-12-01 (Contract Theory & Applications)

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