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First-best collusion without communication

  • Rachmilevitch, Shiran
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    I study a 2-bidder infinitely repeated IPV first-price auction without transfers, communication, or public randomization, where each bidderʼs valuation can assume, in each of the (statistically independent) stage games, one of three possible values. Under certain distributional assumptions, the following holds: for every ϵ>0 there is a nondegenerate interval Δ(ϵ)⊂(0,1), such that if the biddersʼ discount factor belongs to Δ(ϵ), then there exists a Perfect Public Equilibrium with payoffs ϵ-close to the first-best payoffs.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0899825613001607
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    Article provided by Elsevier in its journal Games and Economic Behavior.

    Volume (Year): 83 (2014)
    Issue (Month): C ()
    Pages: 224-230

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    Handle: RePEc:eee:gamebe:v:83:y:2014:i:c:p:224-230
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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    1. Heydenreich Birgit & Müller Rudolf & Uetz Marc & Vohra Rakesh, 2008. "Characterization of Revenue Equivalence," Research Memorandum 001, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Susan Athey & Kyle Bagwell, 2004. "Collusion with Persistent Cost Shocks," Levine's Bibliography 122247000000000334, UCLA Department of Economics.
    3. Mailath, George J. & Zemsky, Peter, 1991. "Collusion in second price auctions with heterogeneous bidders," Games and Economic Behavior, Elsevier, vol. 3(4), pages 467-486, November.
    4. Athey, Susan & Bagwell, Kyle, 2001. "Optimal Collusion with Private Information," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 428-65, Autumn.
    5. Andreas Blume & Paul Heidhues, 2003. "Private Monitoring in Auctions," CIG Working Papers SP II 2003-14, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    6. Rachmilevitch, Shiran, 2013. "Endogenous bid rotation in repeated auctions," Journal of Economic Theory, Elsevier, vol. 148(4), pages 1714-1725.
    7. McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
    8. Johannes Hörner & Julian Jamison, 2007. "Collusion with (almost) no information," RAND Journal of Economics, RAND Corporation, vol. 38(3), pages 804-822, 09.
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