Collusion and signaling in auctions with interdependent values

• 成果类型: Article
• 署名作者: Troyan, Peter
• 署名单位: University of Virginia
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2017.05.010
• 发表日期: 2017
• 页码: 319-345
• 关键词: Collusion; Second-price; auction; interdependent values; signaling

摘要

The standard approach to collusion in auctions posits an uninformed, disinterested third party who, prior to the auction, designs and implements a collusive mechanism. In environments where collusion agreements are likely to be both proposed and executed by the involved parties, this approach may neglect information leakages from simply a proposal to collude. We consider a model of collusion where one informed bidder proposes to another, as in Eso and Schummer (2004). We allow for general interdependent values and affiliated signals. In contrast to third party modeling approaches, collusion is inefficient from both a social perspective (except for the case of pure common values) and from the perspective of the ring. Both bidders are better off than without colluding, but the surplus extracted from the seller is distributed asymmetrically between the bidders. The potential for information leakage from proposing is bad for low types, who reveal that they are weak competitors, but is advantageous for high types, because they are able to signal their strength. We identify a so-called briber's curse: whereby acceptance of a proposal causes the proposer to downgrade her expected value for the object. When there is additional competition in the form of bidders outside of the cartel, the briber's curse significantly harms cartel profits and raises seller revenues. (C) 2017 Elsevier Inc. All rights reserved.