The Value of Privacy in Cartels: An Analysis of the Inner Workings of a Bidding Ring

• 成果类型: Article; Early Access
• 署名作者: Kawai, Kei; Nakabayashi, Jun; Ortner, Juan
• 署名单位: University of California System; University of California Berkeley; University of Tokyo; Kyoto University; Boston University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdaf023
• 发表日期: 2025
• 关键词: Repeated games; mixed-strategy; price wars; collusion; COMMUNICATION; COMPETITION; STABILITY; CORRUPTION; EFFICIENCY; oligopoly

摘要

We study how incentive constraints can be relaxed by randomization in a repeated-game setting. Our study is motivated by the workings of a detected bidding cartel that adopted a protocol of keeping the winning bid secret from the designated losers when defection was a concern. Keeping the winning bid secret makes accurately undercutting the winning bid more difficult and makes defection less attractive as potential defectors risk not winning the auction even if they deviate. We formalize these ideas in the context of a repeated-game setting and show that a cartel can attain higher payoffs by having the pre-selected winner randomize its bid and keep it secret from other members. Calibration of the model to the bid data of the cartel suggests that randomization may increase firms' profits by about 56%.