On Ratifiability of Efficient Cartel Mechanisms in First-Price Auctions with Participation Costs and Information Leakage Report as inadecuate




On Ratifiability of Efficient Cartel Mechanisms in First-Price Auctions with Participation Costs and Information Leakage - Download this document for free, or read online. Document in PDF available to download.

Abstract

This paper investigates whether an efficient all-inclusive cartel mechanism studied by McAfee and McMillan 1992 can still preserve its efficiency when bidders can update theirinformation through the cartel’s collusive mechanism and there is a cost to participate in the seller’s auction within the independent private values setting. It is shown that, when the seller uses the first-price auction, the usual efficient cartel mechanisms will no longer beratifiable in the presence of both participation costs and potential information leakage. The bidder with the highest value in the cartel will have incentive to betray, sending a credible signal of his high value and thus discouraging other bidders from participating in the seller’sauction. However, the cartel mechanisms would still be efficient if either participation costor information leakage, but not both, is present.



Item Type: MPRA Paper -

Original Title: On Ratifiability of Efficient Cartel Mechanisms in First-Price Auctions with Participation Costs and Information Leakage-

Language: English-

Keywords: Ratifiability, efficient cartel mechanism, first-price auction, information leakage, participation cost.-

Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D42 - MonopolyD - Microeconomics > D6 - Welfare Economics > D62 - ExternalitiesD - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design-





Author: Cao, Xiaoyong

Source: https://mpra.ub.uni-muenchen.de/57908/







Related documents