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Bidding Rings: A Bargaining Approach

Chatterjee, Kalyan; Mitra, Manipushpak and Mukherjee, Conan LU (2015) In Working Papers,
Abstract
We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We address 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) 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... (More)
We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We address 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) 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
Working Paper
publication status
published
subject
keywords
Bidding rings, Bargaining games, Coalition formation, Auctions
in
Working Papers,
issue
2015:1
pages
27 pages
publisher
Department of Economics, Lund Universtiy
external identifiers
  • scopus:84964329562
DOI
10.1016/j.geb.2016.03.007
language
English
LU publication?
yes
id
66ac2bfd-3acb-4c92-906d-6b6ade8fa5c6 (old id 4986308)
alternative location
http://project.nek.lu.se/publications/workpap/papers/wp15_1.pdf
date added to LUP
2015-01-26 16:55:17
date last changed
2017-01-01 08:03:34
@misc{66ac2bfd-3acb-4c92-906d-6b6ade8fa5c6,
  abstract     = {We address the issue of bidder ring formation in single and multi-unit Vickrey auctions. We address 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) 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},
  keyword      = {Bidding rings,Bargaining games,Coalition formation,Auctions},
  language     = {eng},
  note         = {Working Paper},
  number       = {2015:1},
  pages        = {27},
  publisher    = {Department of Economics, Lund Universtiy},
  series       = {Working Papers, },
  title        = {Bidding Rings: A Bargaining Approach},
  url          = {http://dx.doi.org/10.1016/j.geb.2016.03.007},
  year         = {2015},
}