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| Publications [#291787] of Giuseppe Lopomo
Journal Articles
- Lopomo, G; Marshall, RC; Marx, LM, Inefficiency of collusion at english auctions,
Contributions to Theoretical Economics, vol. 5 no. 1
(January, 2005), WALTER DE GRUYTER GMBH, ISSN 1534-5971 [doi]
(last updated on 2025/04/11)
Abstract:
In its attempts to deter and prosecute big rigging, U.S. antitrust authorities have focused on sealed-bid procurements, rather than on ascending-bid auctions. One possible justification for this focus is the idea, supported by the existing theoretical literature, that collusion creates inefficiency at sealed-bid auctions, but not at ascending-bid auctions. We show when there is no pre-auction communication and the collusive mechanism satisfies ex-post budget balance, collusion does affect efficiency. In particular, any collusive mechanism that increases cartel members' expected payoffs relative to non-cooperative play results in inefficiency either in the allocation among cartel members or in the allocation between cartel and non-cartel bidders, or both. Copyright © 1999-2005 Internet-Journals, Inc. All rights reserved.
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