Collusion Via Signalling in Open Ascending Auctions with Multiple Objects and Complementarities

Abstract

Collusive equilibria exist in open ascending auctions with multiple objects, if the number of the bidders is sufficiently small relative to the number of objects, even with large complementarities in the buyers' utility function. The bidders collude by dividing the objects among themselves, while keeping the prices low. Hence the complementarities are not realized.