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Bidding rings : a bargaining approach

Chatterjee, Kalyan; Mitra, Manipushpak and Mukherjee, Conan LU (2016) In Games and Economic Behavior
Abstract
We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We analyze this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring , that includes the winner and the top (r−1)(r−1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, and, depending on the protocol, the remaining winners free... (More)
We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We analyze this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring , that includes the winner and the top (r−1)(r−1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, and, depending on the protocol, the remaining winners free ride either by staying alone or by colluding in pairs. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
Bidding rings, Bargaining games, Coalition formation, Auctions, C71, C72, C78, D44, L41
in
Games and Economic Behavior
pages
16 pages
publisher
0899-8256
external identifiers
  • Scopus:84964329562
ISSN
0899-8256
DOI
10.1016/j.geb.2016.03.007
language
English
LU publication?
yes
id
17f55d99-ab5d-4834-9329-fe0a77239ca1
date added to LUP
2016-07-25 13:44:47
date last changed
2016-10-30 04:49:01
@misc{17f55d99-ab5d-4834-9329-fe0a77239ca1,
  abstract     = {We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We analyze this issue in a bargaining game set up under the assumption that valuation of bidders is commonly known only amongst themselves. In the single unit case, we show that the equilibrium coalition structure can only be an order preserving r-ring  , that includes the winner and the top (r−1)(r−1) losers. In the multiple units case, we specify sufficient conditions for formation of an interesting class of equilibrium coalition structures, which we call single winner ring with free riding, where exactly one winner colludes with all the losers and generates maximum possible bidders' surplus, and, depending on the protocol, the remaining winners free ride either by staying alone or by colluding in pairs.},
  author       = {Chatterjee, Kalyan and Mitra, Manipushpak and Mukherjee, Conan},
  issn         = {0899-8256},
  keyword      = {Bidding rings,Bargaining games,Coalition formation,Auctions,C71,C72,C78,D44,L41},
  language     = {eng},
  month        = {03},
  pages        = {16},
  publisher    = {ARRAY(0x901fc68)},
  series       = {Games and Economic Behavior},
  title        = {Bidding rings :  a bargaining approach},
  url          = {http://dx.doi.org/10.1016/j.geb.2016.03.007},
  year         = {2016},
}