Optimal auctions when a seller is bound to sell to collusive bidders

Nicolas Gruyer (1)

1 LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien

I consider optimal auctions for a seller who is bound to sell a single item to one of two potential buyers, organized as " well-coordinated " cartel. I show that, even though the seller cannot deter collusion, he can optimally accommodate it by employing a simple mechanism which imposes an inefficient allocation on the bidders unless they pay a sufficiently high amount to avoid it.

Domaines: Sciences de l'Homme et Société; Economies et finances

Nicolas Gruyer. Optimal auctions when a seller is bound to sell to collusive bidders. Journal of Industrial Economics, 2009, 57 (4), pp 835-850. ⟨10.1111/j.1467-6451.2009.00397.x⟩. ⟨hal-01021568⟩