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OPTIMAL AUCTIONS WHEN A SELLER IS BOUND TO SELL TO COLLUSIVE BIDDERS -super-

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  • NICOLAS GRUYER

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. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

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  • Nicolas Gruyer, 2009. "OPTIMAL AUCTIONS WHEN A SELLER IS BOUND TO SELL TO COLLUSIVE BIDDERS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 57(4), pages 835-850, December.
  • Handle: RePEc:bla:jindec:v:57:y:2009:i:4:p:835-850
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    References listed on IDEAS

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    Cited by:

    1. Pavlov Gregory, 2011. "Optimal Mechanism for Selling Two Goods," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 11(1), pages 1-35, February.

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