2019/12/08 by Jingfeng Lu, Lu, Jingfeng, Zongwei Lu +3
Decision Sciences · Social Sciences · #Auction Theory and Applications #Experimental Behavioral Economics Studies #FOS: Economics and business #Game Theory and Applications #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.1912.03607
openalex publication_date 2019/12/08 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We study collusion in a second-price auction with two bidders in a dynamic environment. One bidder can make a take-it-or-leave-it collusion proposal, which consists of both an offer and a request of bribes, to the opponent. We show that there always exists a robust equilibrium in which the collusion success probability is one. In the equilibrium, for each type of initiator the expected payoff is generally higher than the counterpart in any robust equilibria of the single-option model (Esö and Schummer (2004)) and any other separating equilibria in our model.