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Auctions and corruption: An analysis of bid rigging by a corrupt auctioneer
JournalArticle (Originalarbeit in einer wissenschaftlichen Zeitschrift)
 
ID 238485
Author(s) Lengwiler, Yvan; Wolfstetter, Elmar
Author(s) at UniBasel Lengwiler, Yvan
Year 2010
Title Auctions and corruption: An analysis of bid rigging by a corrupt auctioneer
Journal Journal of Economic Dynamics and Control
Volume 34
Number 10
Pages / Article-Number 1872-1892
Keywords Auctions, Corruption, Procurement, Bid rigging
Abstract

In many auctions, the auctioneer is an agent of the seller. This invites corruption. We analyze a model in which the auctioneer orchestrates bid rigging by inviting a bidder to either lower or raise his bid, whichever is more profitable. The interplay between these two types of corruption gives rise to a complex bidding problem that we tackle with numerical methods. Our results indicate that corruption does not only redistribute surplus away from the seller, but also distorts efficiency. We furthermore explain why both, the auctioneer and bidders, have a vested interest in maintaining corruption.

Publisher Elsevier
ISSN/ISBN 0165-1889
edoc-URL http://edoc.unibas.ch/dok/A5265549
Full Text on edoc No
Digital Object Identifier DOI 10.1016/j.jedc.2010.03.002
ISI-Number WOS:000283207500003
Document type (ISI) Article
 
   

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