Auctions and collusion.

Authors
Publication date
1999
Publication type
Thesis
Summary Most economic work on auction analysis assumes that bidders behave in an uncooperative manner. However, as the facts show, they can coordinate and collude secretly. The purpose of this paper is to study the mechanisms of cartel formation in auctions and tenders and the problem of their prevention and detection. In general, explicit coordination of bidders implies that they exchange private information about the reservation value they assign to an auctioned good or the cost they associate with the realization of a contract awarded by tender, in order to designate among the members of the cartel the one who will be awarded the good or the contract. To the extent that the choice of this agent and the sharing of the cooperative surplus may depend on his announcement, he may have an interest in manipulating the information he reveals. In this context of asymmetric information, the first part of this thesis is devoted to the determination of optimal coordination mechanisms for bidders in the context of given auctions and tenders. The second part of this thesis provides a general reflection on the possibilities of fighting against the formation of cartels, as their presence in an auction or a tender reduces the income of the initiator of the procedure and can have a negative impact on social welfare. The paper analyzes the factors that may favor the formation of cartels, then studies the possibilities of reaction of the initiator of the tender and finally focuses on the influence of the detection risk on the formation of cartels.
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