Advanced Micro · advanced
What moves on the Auction Theory diagram
Collusion removes effective rivals, so optimal bids fall well below value. Auction design (reserve prices, sealed bids) is partly a defence against exactly this.
Rivals are what force bids toward true value.
A ring forms: members agree not to bid against each other.
Effective competition collapses and the bid function rotates down: heavy shading returns.
The seller's revenue is quietly transferred to the ring, which is why bid rigging is a criminal cartel offence almost everywhere.
Examiners ask this as: collusion, bidding ring, bid rigging, cartel auction, antique dealers ring.
Other scenarios on Auction Theory