Controlling collusion in auctions: The Role of ceilings and reserve prices
We examine a simple model of collusion under a single-object secondprice auction. Under the appropriate parameter conditions, in particular as long as collusion is neither too easy, nor too difficult, we find that the optimal policy involves both an effective ceiling, as well as a reserve price set at the lowest bidder valuation.
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Sonderforschungsbereich 504 Publications
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