Essays on bid rigging

Gyula Seres

Research output: ThesisDoctoral Thesis

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Manipulating prices in auctions raises antitrust concerns. Collusion lowers the revenue of the auctioneer and creates information rents. Bid rigging is a prevalent phenomenon and the affected market is enormous. Public procurement amounts to between 10 and 25 percent of national GDP in industrialized countries. This doctoral thesis contributes to the literature by showing that the source of information asymmetry between cartel members has a profound effect on the feasibility and form of collusion. This point is not without policy relevance. Results of this thesis can contribute to our understanding on combating collusion and promoting allocative efficiency.
Chapter 1 builds up a model showing public revelation of information by the auctioneer may foster cartel formation and decrease expected revenue, contradicting the Linkage Principle. Chapter 2 investigates the form of cartel mechanisms. A theoretical model shows why knockout auctions are the prevalent form of bid rigging. Full information revelation within cartel is generally not possible in equilibrium. Chapter 3 is an experimental study focusing on the effect of auction cartels on allocative efficiency. Robust estimates show that the effect is negative and significant.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
  • Boone, Jan, Promotor
  • Noussair, Charles, Promotor
Award date29 Jun 2016
Place of PublicationTilburg
Print ISBNs9789056684785
Publication statusPublished - 2016


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