Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313195 
Year of Publication: 
2023
Citation: 
[Journal:] Economic Theory Bulletin [ISSN:] 2196-1093 [Volume:] 11 [Issue:] 2 [Publisher:] Springer International Publishing [Place:] Cham [Year:] 2023 [Pages:] 255-275
Publisher: 
Springer International Publishing, Cham
Abstract: 
We analyze Stackelberg leadership in a first-price auction. Leadership is induced by an information system, represented by a spy, that leaks one bidder’s bid before others choose their bids. However, the leader may secretly revise his bid with some probability; therefore, the leaked bid is only an imperfect signal. Whereas leadership with perfect commitment exclusively benefits the follower, imperfect commitment yields a collusive outcome, even if the likelihood that the leader may revise his bid is arbitrarily small. This collusive impact shows up in all equilibria and is strongest in the unique pooling equilibrium which is also payoff dominant.
Subjects: 
Auctions
Tacit collusion
Espionage
Second-mover advantage
Signaling
Incomplete information
JEL: 
L12
L13
L41
D43
D44
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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