Nicolas Gruyer

Optimal Auctions When a Seller is Bound to Sell to Collusive Bidders

I consider optimal auctions for a seller who is bound to sell a single item to one of two potential buyers, organized in a ‘well-coordinated’ cartel. I show that, even though the seller cannot deter collusion, he can optimally accommodate it by employing a simple mechanism which imposes an inefficient allocation on the bidders unless they pay a sufficiently high amount to avoid it.

Should we Auction Airport Slots (

Abstract The current allocation of slots on congested European airports constitutes an obstacle to the effective liberalisation of air transport in Europe. With a view to favouring efficient slot utilisation, we propose to use a market mechanism, based on temporary utilisation licences. We then describe an iterated combinatorial auction mechanism where a percentage of licences would be reallocated each season. Since a combinatorial auction involve a complex optimisation procedure, we describe how it can be made to work in the case of slots.