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Bidding rings

McAfee, R. Preston and McMillan, John (1992) Bidding rings. American Economic Review, 82 (3). pp. 579-599. ISSN 0002-8282.

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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.

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Additional Information:© 1992 American Economic Association. We thank Louis-Andre Gerard-Varet, Charles Holt, Ignatius Horstmann, Chantale LaCasse, Robert Marshall, Joel Sobel, and three referees for comments. McAfee's research was begun at the U.S. Department of Justice. McMillan thanks the National Science Foundation for research support under grant no. SES-8721124. Formerly SSWP 726.
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Issue or Number:3
Classification Code:JEL: D44, D82, L41
Record Number:CaltechAUTHORS:20171108-163526509
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:83096
Deposited By: Jacquelyn Bussone
Deposited On:16 Nov 2017 23:34
Last Modified:03 Oct 2019 19:02

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