Abstract

Collusion between suppliers in reverse auctions may damage buyers’ benifits and then lower efficiency of resource allocation. Under first-price sealed-bid reverse auction mechanism, suppliers' equilibrium bidding strategy and buyers' revenue loss was analyzed considering collusion. Then some general conclusions were given: suppliers' bidding strategy is relevant to some factors such as valuation costs, the number of suppliers and Cartel; the number of suppliers and Carter can lead to buyers revenue loss. Finally, considering two different kinds of distribution function, the strategies of improving buyer’s revenue were discussed.

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