Abstract
We introduce a class of mechanisms, called bidding clubs, for agents to coordinate their bidding in auctions. In a bidding club agents Þrst conduct a “pre-auction” within the club; depending on the outcome of the pre-auction some subset of the members of the club bid in the primary auction in a prescribed way; and, in some cases, certain monetary transfers take place after the auction. Bidding clubs have self-enforcing collusion properties in the context of secondprice auctions. We show that this is still true when multiple auctions take place for substitutable goods, as well as for complementary goods. We also present a bidding club protocol for Þrst-price auctions. Finally, we show cases where bidding clubs have self-enforcing cooperation protocols in arbitrary mechanisms.
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