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Bidding Rings

McAfee, R. Preston and McMillan, John (1990) Bidding Rings. Social Science Working Paper, 726. California Institute of Technology , Pasadena, CA. (Unpublished)

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We characterize coordinated bidding strategies in two cases: a weak cartel, in which the bidders cannot make side-payments; and a strong cartel, in which the cartel members can exclude new entrants and can make transfer payments. The weak cartel can do no better than have its members submit identical bids. The strong cartel in effect reauctions the good among the cartel members.

Item Type:Report or Paper (Working Paper)
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Additional Information:Revised version. Original dated to December 1989 Published as McAfee, R. Preston, and John McMillan. "Bidding rings." The American Economic Review (1992): 579-599.
Group:Social Science Working Papers
Subject Keywords:Cartels, Auctions, Bidding, Collusion, Profitability theory, Economic theory, Price efficiency, Transfer payments, Economic value, Valuation
Series Name:Social Science Working Paper
Issue or Number:726
Record Number:CaltechAUTHORS:20170901-140002664
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81086
Deposited By: Jacquelyn Bussone
Deposited On:05 Sep 2017 23:51
Last Modified:03 Oct 2019 18:38

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