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Full-Text Articles in Industrial Organization
Collusive Bidding In The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz
Collusive Bidding In The Fcc Spectrum Auctions, Peter Cramton, Jesse Schwartz
Jesse A. Schwartz
This paper describes the bid signaling that occurred in many of the FCC spectrum auctions. Bidders in these auctions bid on numerous spectrum licenses simultaneously, with bidding remaining open on all licenses until no bidder is willing to raise the bid on any license. Simultaneous open bidding allows bidders to send messages to their rivals, telling them on which licenses to bid and which to avoid. This “code bidding” occurs when one bidder tags the last few digits of its bid with the market number of a related license. We examine how extensively bidders signaled each other with retaliating bids …
Cartelization Through Buyer Groups, Chris Doyle, Martijn Han
Cartelization Through Buyer Groups, Chris Doyle, Martijn Han
Martijn A. Han
Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to commit credibly to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are then refunded from suppliers to retailers through slotting allowances or rebates. The stability of such an ‘implied cartel’ depends on the retailers’ incentives to source their inputs secretly from a supplier outside of the buyer group arrangement at lower input prices. Cheating is limited if retailers sign exclusive dealing or minimum purchase …