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Combinatorial Procurement Auctions: A Collusion Remedy?


  • Anders Lunander

    () (Örebro University)

  • Jan-Eric Nilsson

    () (Swedish National Road and Transport Research Institute, Borlänge)


This paper presents the outcome of an experiment where the standard one shot sealed bid procurement auction for two identical goods provides the benchmark. Inducing scale economies a combinatorial auction is applied on the situation with non-linear costs. The mechanisms are first run without, and then with the possibility for subjects to communicate prior to bidding. There are two human and one computer bidder in each period. It is demonstrated that the combinatorial mechanism is able to enhance efficiency and that subjects are less inclined to cooperate under the combinatorial auction than under the standard bidding format.

Suggested Citation

  • Anders Lunander & Jan-Eric Nilsson, 2006. "Combinatorial Procurement Auctions: A Collusion Remedy?," Rivista di Politica Economica, SIPI Spa, vol. 96(1), pages 65-90, January-F.
  • Handle: RePEc:rpo:ripoec:v:96:y:2006:i:1:p:65-90

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    References listed on IDEAS

    1. Paul Klemperer, 2004. "Auctions: Theory and Practice," Online economics textbooks, SUNY-Oswego, Department of Economics, number auction1.
    2. R. Preston McAfee & John McMillan, 1986. "Bidding for Contracts: A Principal-Agent Analysis," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 326-338, Autumn.
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation


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