The Study On Collusion And Corruption In Auction

The application of the auction has been so far for quite a long time. However, theauction theory was only created and has been developing over the past fifty years.Since the1996, the pioneer of the auction theory, Vickrey, was honored the NobelPrize in economics. Both in the private sector or the public sector, all kinds of auctiondesigned by economists are widely applied.Because of many reasons, such as principal-agent in the auction process, and theasymmetric information, so the auction collusion and corruption in the process haveoccurred from time to time, especially in countries and regions where the system isimperfect.Collusion and corruption and its influence of the auction has become apressing matter of the moment. This paper discusses the collusion and corruptionphenomenon appearing in the auction theory.Firstly, introduces the basic theory of auction theory and mechanism design.Secondly, the basic theory as the tool, using game theory, establishes amathematic model of collusion in the private value under the assumption of the firstprice auction and second price auction.The reason, to conspire to form the operationmode, stability, and bidders, sellers’ interests are analyzed, compared the stability ofcollusion in the two types of auction.The conclusions are:The second price auction than the first price auction is more prone to conspiracy.The reservation price increases with the expansion of the scale of collusion.Thirdly, constructs the private values assumption, the relative mathematicalmodel finite corruption first price auction. Analysis of the impact of corruption degreechange produces results on auction. We use the briber won the bid number to measurethe extent of corruption.By analyzing the effect of relatively limited to auction, theauctioneer’s corruption, the strategy, the interests of the owner.We conclude that:Corruption and not by other bidders discovered, in the first price auctionmechanism, along with the quantity increase briber tender.Other bidders of thebidding strategy, expected revenue and expected to pay no change;The briber’s expected revenue increase, expect to pay less. The owner’s expected revenuereduction.Finally, according to the conclusions, the paper puts forward the "To preventcollusion and corruption" measures.The original paper, hope to provide a useful reference for auction designers.