This paper considers the question of tacit collusion in repeated auctions with independent private values. McAfee and McMillan show that the extent of collusion is limited by the availability of transfers. If no transfers are possible, the private information of bidders precludes any collusive scheme beyond bid rotation (BRS), even when the cartel has unlimited enforcement.
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Paper provided by University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number
463.
Length: 30 pages Date of creation: 1999 Date of revision: Handle: RePEc:roc:rocher:463
Contact details of provider: Postal: UNIVERSITY OF ROCHESTER, CENTER FOR ECONOMIC RESEARCH, DEPARTMENT OF ECONOMICS, HARKNESS 231 ROCHESTER NEW YORK 14627 U.S.A.
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