IDEAS home Printed from https://ideas.repec.org/b/dau/thesis/123456789-7238.html
   My bibliography  Save this book

Mécanismes d'échange en présence d'externalités

Editor

Listed:
  • Forges, Françoise

Author

Listed:
  • Biran, Omer

Abstract

We study the question of collusion in auctions. We start by presenting a model of a first price auction with complete information and direct asymmetric externalities. Following a non-cooperative approach we study the negotiations process which yields a cartel. We show that in the presence of direct externalities the grand coalition may not form, proposing an example of an auction in which a small coalition forms in equilibrium. We continue by studying the stability (in the sense of the core) of coalitions in Bayesian games. We show that all coalitional equilibria can be made incentive compatible. We apply the notion of stability on standard auctions without direct externalities, establishing (mainly) the stability of the grand coalition. With direct externalities and complete information we show that the grand coalition (as well as small coalitions) may become unstable. We conclude by examining the notion of stability in second price auctions with direct externalities and incomplete information. We identify a class of tractable equilibria for these auctions for any given collusion scheme. Finally, in this model, we demonstrate the instability of the grand coalition in the presence of direct externalities, identifying (again) direct externalities as an obstacle to cooperation.

Suggested Citation

  • Biran, Omer, 2011. "Mécanismes d'échange en présence d'externalités," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7238 edited by Forges, Françoise, November.
  • Handle: RePEc:dau:thesis:123456789/7238
    Note: dissertation
    as

    Download full text from publisher

    File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/7238/1/TradingMechanisms_Biran.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Patrick Bajari, 2001. "Comparing competition and collusion: a numerical approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 18(1), pages 187-205.
    2. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, vol. 7(2), pages 193-220, September.
    3. Ray, Debraj, 2007. "A Game-Theoretic Perspective on Coalition Formation," OUP Catalogue, Oxford University Press, number 9780199207954.
    4. Ken Hendricks & Robert Porter & Guofu Tan, 2008. "Bidding rings and the winner's curse," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1018-1041, December.
    5. Bernard Caillaud & Philippe Jehiel, 1998. "Collusion in Auctions with Externalities," RAND Journal of Economics, The RAND Corporation, vol. 29(4), pages 680-702, Winter.
    6. Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1996. "How (Not) to Sell Nuclear Weapons," American Economic Review, American Economic Association, vol. 86(4), pages 814-829, September.
    7. Che, Yeon-Koo & Kim, Jinwoo, 2009. "Optimal collusion-proof auctions," Journal of Economic Theory, Elsevier, vol. 144(2), pages 565-603, March.
    8. Patrick Bajari & Lixin Ye, 2003. "Deciding Between Competition and Collusion," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 971-989, November.
    9. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March.
    10. Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
    11. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
    12. Forges, Francoise & Minelli, Enrico & Vohra, Rajiv, 2002. "Incentives and the core of an exchange economy: a survey," Journal of Mathematical Economics, Elsevier, vol. 38(1-2), pages 1-41, September.
    13. Porter, Robert H & Zona, J Douglas, 1993. "Detection of Bid Rigging in Procurement Auctions," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 518-538, June.
    14. Philippe Jehiel & Benny Moldovanu, 1999. "Resale Markets and the Assignment of Property Rights," Review of Economic Studies, Oxford University Press, vol. 66(4), pages 971-991.
    15. repec:dau:papers:123456789/158 is not listed on IDEAS
    16. Bloch, Francis & Gomes, Armando, 2006. "Contracting with externalities and outside options," Journal of Economic Theory, Elsevier, vol. 127(1), pages 172-201, March.
    17. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071, December.
    18. Riham Barbar & Françoise Forges, 2007. "Collusion dans les enchères. Quelques apports des jeux coopératifs," Revue économique, Presses de Sciences-Po, vol. 58(5), pages 965-984.
    19. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    20. Marshall, Robert C. & Marx, Leslie M., 2007. "Bidder collusion," Journal of Economic Theory, Elsevier, vol. 133(1), pages 374-402, March.
    21. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, vol. 86(1), pages 123-147, May.
    22. Philippe Jehiel & Benny Moldovanu, 1996. "Strategic Nonparticipation," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 84-98, Spring.
    23. Graham, Daniel A & Marshall, Robert C, 1987. "Collusive Bidder Behavior at Single-Object Second-Price and English Auctions," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1217-1239, December.
    24. Martin Pesendorfer, 2000. "A Study of Collusion in First-Price Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 381-411.
    25. McAfee, R Preston & McMillan, John, 1992. "Bidding Rings," American Economic Review, American Economic Association, vol. 82(3), pages 579-599, June.
      • McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
    26. Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1999. "Multidimensional Mechanism Design for Auctions with Externalities," Journal of Economic Theory, Elsevier, vol. 85(2), pages 258-293, April.
    27. Robert H. Porter & J. Douglas Zona, 1999. "Ohio School Milk Markets: An Analysis of Bidding," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 263-288, Summer.
    28. Haeringer, Guillaume, 2004. "Equilibrium binding agreements: a comment," Journal of Economic Theory, Elsevier, vol. 117(1), pages 140-143, July.
    29. Myerson, Roger B., 2007. "Virtual utility and the core for games with incomplete information," Journal of Economic Theory, Elsevier, vol. 136(1), pages 260-285, September.
    30. R. M. Thrall & W. F. Lucas, 1963. "N‐person games in partition function form," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 10(1), pages 281-298, March.
    31. d'Aspremont, C. & Gerard-Varet, L. -A., 1982. "Bayesian incentive compatible beliefs," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 83-103, June.
    32. Waehrer, Keith, 1999. "Asymmetric private values auctions with application to joint bidding and mergers," International Journal of Industrial Organization, Elsevier, vol. 17(3), pages 437-452, April.
    33. Lebrun, Bernard, 1999. "First Price Auctions in the Asymmetric N Bidder Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-142, February.
    34. Marc S. Robinson, 1985. "Collusion and the Choice of Auction," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 141-145, Spring.
    35. Hafalir, Isa E., 2007. "Efficiency in coalition games with externalities," Games and Economic Behavior, Elsevier, vol. 61(2), pages 242-258, November.
    36. Groves, Theodore, 1973. "Incentives in Teams," Econometrica, Econometric Society, vol. 41(4), pages 617-631, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Omer Biran, 2013. "Strategic collusion in auctions with externalities," Theory and Decision, Springer, vol. 75(1), pages 117-136, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Biran, Omer, 2011. "Core stable bidding rings in independent private value auctions with externalities," MPRA Paper 32164, University Library of Munich, Germany.
    2. Biran, Omer & Forges, Françoise, 2011. "Core-stable rings in auctions with independent private values," Games and Economic Behavior, Elsevier, vol. 73(1), pages 52-64, September.
    3. Omer Biran, 2013. "Strategic collusion in auctions with externalities," Theory and Decision, Springer, vol. 75(1), pages 117-136, July.
    4. repec:dau:papers:123456789/4100 is not listed on IDEAS
    5. Forges, Françoise & Orzach, Ram, 2011. "Core-stable rings in second price auctions with common values," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 760-767.
    6. repec:dau:papers:123456789/7891 is not listed on IDEAS
    7. Wang, Hong, 2017. "Information acquisition versus information manipulation in multi-period procurement markets," Information Economics and Policy, Elsevier, vol. 40(C), pages 48-59.
    8. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    9. Hu, Audrey & Offerman, Theo & Onderstal, Sander, 2011. "Fighting collusion in auctions: An experimental investigation," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 84-96, January.
    10. Cantillon, Estelle, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," Games and Economic Behavior, Elsevier, vol. 62(1), pages 1-25, January.
    11. Aryal, Gaurab & Gabrielli, Maria F., 2013. "Testing for collusion in asymmetric first-price auctions," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 26-35.
    12. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
    13. Loyola, Gino, 2008. "On bidding markets: the role of competition," UC3M Working papers. Economics we083318, Universidad Carlos III de Madrid. Departamento de Economía.
    14. Olga Gorelkina, 2014. "Bidder Collusion and the Auction with Target Bids," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2014_10, Max Planck Institute for Research on Collective Goods.
    15. Sumit Joshi & Poorvi Vora, 2013. "Weak and strong multimarket bidding rings," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(3), pages 657-696, August.
    16. Marshall, Robert C. & Marx, Leslie M., 2007. "Bidder collusion," Journal of Economic Theory, Elsevier, vol. 133(1), pages 374-402, March.
    17. Che, Yeon-Koo & Kim, Jinwoo, 2009. "Optimal collusion-proof auctions," Journal of Economic Theory, Elsevier, vol. 144(2), pages 565-603, March.
    18. Aniol Llorente-Saguer & Ro’i Zultan, 2014. "Auction Mechanisms And Bidder Collusion: Bribes, Signals And Selection," Working Papers 1406, Ben-Gurion University of the Negev, Department of Economics.
    19. Ray, Debraj & Vohra, Rajiv, 2015. "Coalition Formation," Handbook of Game Theory with Economic Applications,, Elsevier.
    20. Lebrun, Bernard, 2006. "Uniqueness of the equilibrium in first-price auctions," Games and Economic Behavior, Elsevier, vol. 55(1), pages 131-151, April.
    21. Paul Klemperer, 2007. "Bidding Markets," Journal of Competition Law and Economics, Oxford University Press, vol. 3(1), pages 1-47.
    22. John Asker & Chaim Fershtman & Jihye Jeon & Ariel Pakes, 2016. "The Competitive Effects of Information Sharing," NBER Working Papers 22836, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Alliances stratégiques; Négociations; Cartels; Théorie des jeux; Vente aux enchères;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dau:thesis:123456789/7238. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/daup9fr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alexandre Faure The email address of this maintainer does not seem to be valid anymore. Please ask Alexandre Faure to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/daup9fr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.