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Core-stable rings in auctions with independent private values

Author

Listed:
  • Omer Biran

    (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Francoise Forges

    (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

We propose a semi-cooperative game theoretic approach to check whether a given coalition is stable in a Bayesian game with independent private values. The ex ante expected utilities of coalitions, at an incentive compatible (noncooperative) coalitional equilibrium describe a (cooperative) partition form game. A coalition is core-stable if the core of suitable characteristic function, derived from the partition form game, is not empty.. an application, we study collusion in auctions in which the bidders' final utility possible depends on the winner's identity. We show that such direct externalities offer a possible explanation for cartels' structures (not) observed in practice.

Suggested Citation

  • Omer Biran & Francoise Forges, 2011. "Core-stable rings in auctions with independent private values," Post-Print hal-00632260, HAL.
    • Handle: RePEc:hal:journl:hal-00632260
    DOI: 10.1016/j.geb.2011.01.009
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Françoise Forges & Roberto Serrano, 2013. "Cooperative Games With Incomplete Information: Some Open Problems," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1-17.
    2. 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.
    3. Omer Biran, 2011. "Core stable bidding rings in independent private value auctions with externalities," Working Papers halshs-00608008, HAL.
    4. Olga Gorelkina, 2018. "Collusion via Information Sharing and Optimal Auctions," Working Papers 20182, University of Liverpool, Department of Economics.
    5. Brangewitz, Sonja & Brockhoff, Sarah, 2017. "Sustainability of coalitional equilibria within repeated tax competition," European Journal of Political Economy, Elsevier, vol. 49(C), pages 1-23.
    6. Brangewitz, Sonja & Brockhoff, Sarah, 2014. "Stability of coalitional equilibria within repeated tax competition," Center for Mathematical Economics Working Papers 461, Center for Mathematical Economics, Bielefeld University.
    7. Sonja Brangewitz & Sarah Brockhoff, 2012. "Stability of Coalitional Equilibria within Repeated Tax Competition," Working Papers CIE 48, Paderborn University, CIE Center for International Economics.
    8. Jonathan Newton, 2019. "Agency Equilibrium," Games, MDPI, vol. 10(1), pages 1-15, March.
    9. Mikhail Safronov, 2016. "A Coasian Approach to Efficient Mechanism Design," Cambridge Working Papers in Economics 1619, Faculty of Economics, University of Cambridge.
    10. repec:dau:papers:123456789/8158 is not listed on IDEAS
    11. repec:dau:papers:123456789/7891 is not listed on IDEAS
    12. Forges, Françoise, 2013. "A folk theorem for Bayesian games with commitment," Games and Economic Behavior, Elsevier, vol. 78(C), pages 64-71.
    13. Omer Biran, 2013. "Strategic collusion in auctions with externalities," Theory and Decision, Springer, vol. 75(1), pages 117-136, July.
    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. Safronov, Mikhail, 2018. "Coalition-proof full efficient implementation," Journal of Economic Theory, Elsevier, vol. 177(C), pages 659-677.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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