Controlling Collusion in Auctions: The Role of Ceilings and Reserve Prices

Roy Chowdhury, Prabal (2006): Controlling Collusion in Auctions: The Role of Ceilings and Reserve Prices.

Abstract

We examine a simple model of collusion under a single-object second-price auction. Under the appropriate parameter conditions, in particular as long as collusion is neither too easy, nor too difficult, we find that the optimal policy involves both an effective ceiling, as well as a reserve price.

• Item Type: MPRA Paper
• Institution: Indian Statistical Institute, Delhi Center
• Language: English
• Keywords: Auctions; ceilings; collusion; reserve prices
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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