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Collusion enforcement in repeated first-price auctions

Author

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  • Zhang, Wenzhang

    (School of Economics, Zhejiang University)

Abstract

In the context of repeated first-price auctions, we explore how a bid-rigging cartel can simultaneously overcome the difficulty of soliciting truthful private information about valuations and the difficulty of enforcing its internal mechanism. Focusing on the class of trigger-strategy collusive agreements, we explicitly characterize the optimal collusive agreement for any given discount factor. Making use of the characterization, we also explore how a long-run seller can use a reserve price to fight the cartel.

Suggested Citation

  • Zhang, Wenzhang, 2022. "Collusion enforcement in repeated first-price auctions," Theoretical Economics, Econometric Society, vol. 17(4), November.
    • Handle: RePEc:the:publsh:4640
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Collusion; bidding rings; first-price auctions; repeated games;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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