Selected Readings in Antitrust Economics: Game Theory1
American Bar Association Section of Antitrust Law Economics Committee May 2014
This annotated bibliography contains selected readings on the basic principles of game theory as
applied in antitrust analysis. These readings have primarily been chosen to provide intuitive,
non-technical discussions of basic concepts for lawyers with little formal training in economics or
mathematics. We supplement these basic readings with somewhat more technical treatments in
economics texts and journal articles. For readers wishing to go further, we also provide citations to
more advanced treatments, which are indicated by asterisks. Finally, we plan to revise, update, and
expand this list over time, and we would appreciate suggestions for additional readings or
substitutes that provide solid, intuitive explanations.
I.
Introduction to Game Theory
KEN BINMORE, PLAYING FOR REAL: A TEXT ON GAME THEORY (2007).
This is an updated version of Ken Binmore’s classic introduction to Game Theory, Fun
and Games (1992). It maintains the same combination of intellectual seriousness and
lighthearted exposition as the original. The text lays the foundations for understanding and
applying game theory, illustrating the theoretical concepts with a discussion of real-world
examples.
AVINASH K. DIXIT & BARRY NALEBUFF, THINKING STRATEGICALLY: THE COMPETITIVE EDGE
IN BUSINESS, POLITICS, AND EVERYDAY LIFE (1993).
This book provides a discussion of the possible application of game theory to strategic
questions in various fields.
RICHARD IPPOLITO, Game Theory and Related Issues: Strategic Thinking When Players Are
Few and Information Is Poor, in ECONOMICS FOR LAWYERS (2005).
A non-technical introduction to game theory concepts. It includes a table of main
economic concepts and new terms.
* JOHN MCMILLAN, Playing Games as Games, in GAMES, STRATEGIES, & MANAGERS (1992).
This offers a simple definition with numerous illustrative examples. An excellent,
non-technical introduction to game theory aimed at managers and business school
students.
1
The following individuals contributed to developing this reading list: Tracy Orcholski, Yianis Sarafidis, Cleve
Tyler, Clarissa Yeap, Mirjam Jasiak, Michael Kheyfets, and Nadezhda Nikonova.
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II.
Nash Equilibrium (the most common equilibrium concept used in game theory)
Sylvia Nasar, Introduction to HAROLD W. KUHN & SYLVIA NASAR, THE ESSENTIAL JOHN
NASH (2007).
This book includes a non-technical introduction to John Nash's contributions to game
theory by the author of A Beautiful Mind, a biography of Nash that was made into a movie.
MARTIN OSBORNE, Nash Equilibrium Theory and Nash Equilibrium: Illustrations, in AN
INTRODUCTION TO GAME THEORY (2004).
This is a widely-used introductory Game Theory textbook for advanced undergraduates.
Chapters 2 and 3 provide a logically precise but non-mathematical explanation of Nash
equilibrium and examples of its use in solving classic problems that extend to many
situations in economics, social, and political life.
ROBERT S. PINDYCK & DANIEL L. RUBINFELD, Game Theory and Competitive Strategy, in
MICROECONOMICS (7th ed. 2008).
This book is a popular introductory economics text for undergraduates and provides a
non-mathematical overview of the major topics in game theory, including Nash
equilibrium and its applications in various strategic and economic situations.
*ROGER B. Myerson, Nash Equilibrium and the History of Economic Theory, 36 J. OF ECON.
LITERATURE 1067 (1999).
This article offers a historical context of Nash's contributions, as well as discussion of
alternate equilibrium concepts that have followed. Myerson views Nash as the father of
modern economic thought. The developments in economics that followed Nash's work are
discussed in a less technical manner than other references. However, these concepts are
still complex, and may be of limited interest to a non-technical audience.
III.
Applications to Oligopoly Theory
A. Overview
DENNIS W. CARLTON & JEFFREY M. PERLOFF, Oligopoly: Game Theory, in MODERN
INDUSTRIAL ORGANIZATION (4th ed. 2005).
This classic introductory industrial organization text provides an overview of the
application of game theory to oligopoly models of competition. It has some math but is not
too technical. It provides an introduction to basic models of static and dynamic
competition, with complementary discussions of real-world examples and experimental
evidence.
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B. The Cournot Model (where firms set quantities)
GIBBONS, ROBERT, Cournot Model of Duopoly, in GAME THEORY FOR APPLIED ECONOMISTS
(1992).
This reading applies the Nash equilibrium concept to a simple Cournot duopoly model. It
explains that Cournot anticipated the Nash equilibrium concept by over a century, in the
particular context of competition between two firms.
Clarence Morrison, Cournot, Bertrand and Modern Game Theory, 26 ATLANTIC ECON. J. 172
(1998).
This is a simple thumbnail sketch of the model. It also contains a non-technical discussion
of Cournot's original writing as compared to the textbook version of his writings.
*Janusz Ordover, Alan O. Sykes & Robert D. Willing, Herfindahl Concentration, Rivalry,
and Mergers, 95 HARV. L. REV. (1982).
This is a semi-technical discussion of the Lerner Index for oligopolies, with the Cournot
model as a special case. The derivation of the Lerner Index as a measure of monopoly
power is helpful. It discusses how the application of the Lerner Index to oligopoly rather
than monopoly is more complex because of the complexity introduced by strategic
interaction – which monopolists, by definition, do not face – in oligopolistic competition.
*David M. Kreps & Jose A. Scheinkman, Quantity Precommitments and Bertrand
Competition Yield Cournot Outcomes, 14 BELL J. ECON. 326 (1983).
This paper is somewhat technical, but the introduction and abstract provide an intuitive,
accessible discussion of the ideas. The paper links the predictions of the Bertrand and
Cournot models in a fairly intuitive way.
C. The Bertrand Model (where firms set prices)
ROBERT GIBBONS, Bertrand Model of Duopoly, GAME THEORY FOR APPLIED ECONOMISTS
(1992).
This reading applies the Nash equilibrium concept to a simple Bertrand duopoly model. It
shows how the Bertrand and Cournot games are related and compares the Nash
equilibrium solutions for both.
* David M. Kreps & Jose A. Scheinkman, Quantity Precommitments and Bertrand
Competition Yield Cournot Outcomes, 14 BELL J. ECON. 326 (1983).
(See the description of this article in the section above.)
*JEAN TIROLE, Short-Run Price Competition, in THE THEORY OF INDUSTRIAL ORGANIZATION
(1988).
This is a technical discussion of the main problem with the model, namely, that it predicts
a huge difference in the outcome (market price) between one seller and two, but the
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outcome with two sellers is identical to the outcome for many. The chapter also introduces
various proposed solutions to this “paradox.” While quite technical, it does offer some
valuable insights into the model and some natural extensions.
D. The Stackelberg Model (a model with price leadership)
ROBERT GIBBONS, Stackelberg Model of Duopoly, GAME THEORY FOR APPLIED ECONOMISTS
(1992).
This chapter describes the Stackelberg Model, a simple dynamic duopoly model in which
firms make alternating moves. It explains the concept of the backwards induction solution
and how it is related to Nash equilibrium.
James Konow, The Political Economy of Heinrich von Stackelberg, 32 ECON. INQUIRY 146
(1994).
This paper offers an historical context of the model. There is a non-technical discussion of
various interpretations of the model, including the original interpretation, which is
somewhat different than how it is employed in modern textbooks. The bulk of the paper is
devoted to Stackelberg's thinking on the political economy during the Nazi period in
Germany.
*Arthur J. Robson, Duopoly with Endogenous Strategic Timing: Stackelberg Regained, 31
INT’L ECON. REV. 263 (1990).
This paper represents a moderately intuitive attempt to address the question of “who gets
to go first (and be the leader) in a duopoly.” The intuition and basic arguments are
presented non-technically in the introduction. The paper addresses one of the principal
criticisms of the Stackelberg model – namely, when there is an advantage to going first
(being the leader), the selection of that leader (which is not modeled in the article) is
important. The model is introduced in technical writing and addresses this question
explicitly.
IV.
Cooperative and Non-Cooperative Games
KEN BINMORE, Bargaining and Coalitions, in GAME THEORY: A VERY SHORT INTRODUCTION
(2007).
This reading provides a clear and concise definition of cooperative and non-cooperative
games in non-technical language, with engaging examples to explain technical concepts
such as the Nash Bargaining Solution, coalition formation and the Shapley Value.
ROGER MYERSON, Bargaining and Cooperation in Two-Person Games, in GAME THEORY:
ANALYSIS OF CONFLICT (1991).
This chapter introduces the concept of cooperative games in a non-technical and highly
readable format. It sets up a framework for understanding cooperative games by
discussing the relationship between non-cooperative games and cooperative games. This
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chapter provides a link between the topics covered in this section and the topics in above
sections. It explains the concept of the Nash Bargaining Solution, which is related to but
different from the Nash Equilibrium in non-cooperative games.
Alvin E. Roth, Editor’s introduction and overview to ALVIN E. ROTH, GAME THEORETIC
MODELS OF BARGAINING (1985).
This chapter traces the historical evolution of cooperative game theory in economics (also
known as bargaining or axiomatic models). It provides an overview of the foundational
literature.
V.
Non-Price, Non-Quantity Strategies
The Bertrand and the Cournot models (where firms choose price and quantity, respectively) are
the two “workhorse” models of antitrust economic analysis. In real life, however, firms choose
other strategic variables in addition to, or instead of, prices (or quantities). In some industries,
these other strategic variables may be as important as price or quantity, if not more so. In the
pharmaceutical industry, for example, firms are often thought of as competing in R&D spending.
In many consumer products, firms choose how to position and differentiate their brands.
A. Spatial Competition Models (firms choose location)
JOHN MCMILLAN, Playing Games as Games, in GAMES, STRATEGIES, & MANAGERS (1992).
A simple model that is often used in antitrust analysis is the Hotelling model of spatial
competition. In this model, firms choose where to locate on a straight line. This chapter
offers a simple exposition of the problem and the solution with two firms.
JEFFREY CHURCH & ROGER WARE, A Simple Address Model: Hotelling’s Linear City, in
INDUSTRIAL ORGANIZATION: A STRATEGIC APPROACH (2000).
This reading offers a more general, but still accessible, exposition. It also shows the Nash
equilibrium with two and four firms.
* Steven C. Salop, Monopolistic Competition with Outside Goods, 10 BELL J. ECON. 141,
141–156 (1979).
Although more technical, this paper offers a famous extension of the Hotelling linear-city
model to a circular city, where each firm effectively competes with two of its neighbors,
one on each side.
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B. Innovation Models (firms choose R&D spending levels)
JEFFREY CHURCH & ROGER WARE, Two-Stage Games, in INDUSTRIAL ORGANIZATION: A
STRATEGIC APPROACH (2000).
This reading works out a simple numerical example in the context of a two-stage game. In
the first stage, one firm chooses how much to invest in a new technology that reduces its
marginal cost of production. In the second stage, firms compete a la Cournot.
* Jennifer, F. Reinganum, The Timing of Innovation: Research, Development, and Diffusion,
in RICHARD SCHMALENSEE & ROBERT WILLIG, HANDBOOK OF INDUSTRIAL ORGANIZATION,
VOL. 1 (1989).
Although this is a very technical article, the introduction offers a useful “laundry” list of
the types of issues that economists have analyzed in this area.
C. Advertising Models (firms choose advertising spending levels)
JEAN TIROLE, Product Selection, Quality and Advertising, in THEORY OF INDUSTRIAL
ORGANIZATION (1988).
This reading derives the Dorfman-Steiner condition, which states that the optimal
advertising-to-sales ratio is equal to the ratio of the elasticities of demand with respect to
advertising and price. Although, strictly speaking, this is derived in the context of a
single-firm decision problem (not a game), this is one of the seminal results on advertising.
VI.
Vertical Restraints
A. Overview
William S. Comanor & H. E. Frech III, The Competitive Effects of Vertical Agreements?, 75
AM. ECON. REV. 539, 539-546 (1985).
This paper develops a model with a single dominant manufacturer, two types of consumers
(one with brand preference and one without) and segmented distribution. A dominant
manufacturer facing potential entrants in this model charges higher prices with exclusive
contracts than without. The model is not meant to be general, but is intended to
demonstrate that under certain conditions, exclusive dealing can harm consumers, and
therefore, should be reviewed under a rule of reason. This paper overviews several
theories in which consumers are harmed by vertical restraints. It argues for the use of the
rule of reason analysis to assess these restraints.
Benjamin Klein & Kevin Murphy, Vertical Restraints as Contract Enforcement Mechanisms,
31 J. L. & ECON. 265, 265-297 (1988).
The article discusses the effects of vertical restraints on distributor behavior. Vertical
restrictions can encourage market-expanding activities by distributors when
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manufacturers decrease long-run gains to under-performing distributors and increase
long-run gains to over-performing ones.
Oliver E. Williamson, Assessing Vertical Market Restrictions: Antitrust Ramifications of the
Transaction Cost Approach, 127 U. PA. L. REV. 953 (1979).
Williamson argues that vertical restraints (organizational innovations) typically reflect
attempts to realize efficiencies and are best understood in transaction cost
terms. However, in certain circumstances, this presumption can be rebutted. For example,
exclusive dealing by dominant firms (or "tight" oligopolies) can have the effect of
disadvantaging rivals.
Steven C. Salop & David T. Scheffman, Raising Rivals’ Costs, 73 AM. ECON. REV. 267,
267-271 (1983).
This article describes how certain strategies by a dominant (including exclusive dealing)
can raise rivals costs, benefitting the dominant firm. If a strategy increases price
(marginal costs for the fringe competitors) by more than the increase in average cost for
the dominant firm, then these conditions are sufficient for the dominant firm to profit
from the raising rivals' costs strategy.
Francine LaFontaine & Margaret E. Slade, Transaction Cost Economics and Vertical Market
Restrictions, 55 ANTITRUST BULL. 587, 599-600 (2010).
This article reviews types of vertical restraints and summarizes empirical studies regarding
the effects of vertical restraints on consumers. The article finds that the relatively limited
number of empirical studies on the effects of vertical restraints tend to show benefits for
consumers, or at least tend to not find harm to consumers. This overview is consistent with
the view of transaction cost economics that vertical restraints tend to be in place to align
the incentives of owners and agents.
B. Exclusive Dealing (in distribution and retail markets)
Howard Marvel, Exclusive Dealing, 25 J. L. & ECON. 1 (1982).
Marvel presents a paper that provides an efficiency justification for exclusive dealing
arrangements. Exclusive dealing agreements act to ensure that dealers do not act
opportunistically to avoid paying the manufacturer for valuable ancillary services
provided for the product sold. So instead of the view that vertical arrangements exist to
encourage certain behavior by distributors (such as in the case of exclusive territories or
resale price maintenance), Marvel says that exclusive dealing agreements exist to allow for
capital investment required for the on the part of the manufacturer.
William S. Comanor & Patrick Rey, Vertical Restraints and the Market Power of Large
Distributors, 17 REV. INDUSTRIAL ORG. 135 (2000).
As an example of some subsequent papers on exclusive dealings, this paper focuses on a
situation in which a distributor has bargaining power with suppliers. In these
circumstances, vertical restraints (including exclusive dealing) can make it more difficult
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for new manufacturers to arrange for distribution of their products. The paper finds that
entry may be prevented at both stages of production and competition between rival vertical
structures can be negatively impacted.
C. Price Predation
Janusz Ordover & Robert Willig, An Economic Definition of Predation: Pricing and Product
Innovation, 91 YALE L.J. 8 (1981).
This article proposes that a firm engages in predatory behavior only if it can recover the
losses of net revenue through the exercise of additional market power gained by a rivals'
exit. Certain structure characteristics are required for predatory behavior to succeed: (i)
horizontal concentration; (ii) the existence of entry barriers; and (iii) the presence of
reentry barriers. The article argues that predatory behavior can extend to product
innovations that are motivated by the profits related to the exit of a rival and can include
products designed to take sales from a rival, or the introduction of components that are
incompatible with rivals' products.
Joseph Farrell & Michael Katz, Competition or Predation? Consumer Coordination, Strategic
Pricing and Price Floors in Network Industries, 53 J. INDUSTRIAL ECON. 203 (2005).
Farrell and Katz present a model that investigates predatory pricing in industries with
network effects. The model shows that predation may be an equilibrium and that
predation may be more likely in network industries. However, network industries are
also more likely to evolve to an industry with a dominant firm - characteristics that make
the application of policies to address predatory pricing difficult. In network industries,
testing for predation by comparing prices to some measure of cost may not be productive
and the application of some traditional rules can reduce consumer welfare.
D. Tying and Bundling
Michael D. Whinston, Tying, Foreclosure, and Exclusion, 80 AM. ECON. REV. 837 (1990).
This paper critiques the Chicago-School approach to tying, which maintains that a firm
with monopoly power in one market cannot leverage this power to monopolize a second
market through tying. The paper develops a theoretical model that relaxes two typical
assumptions by allowing for economies of scale in the tied good and by assuming an
oligopolistic structure. The author finds that if the firm with monopoly power can commit
to tying, then competitors can be foreclosed in the tied goods market. However, the welfare
effects of tying (both for consumers and generally) are ambiguous.
Benjamin Klein, Market Power in Antitrust: Economic Analysis after Kodak, 3 S. CT. ECON.
REV. 43 (1993).
Klein provides an in-depth discussion of the Kodak decision by the Supreme Court. First,
he says that potential "hold-up" problems are not antitrust issues and do not involve the use
of monopoly power. Second, the paper describes the facts in Kodak as supporting a price
discrimination explanation of Kodak's tie of services to equipment sales. Finally, the ability
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to "hold-up" and/or price discriminate does not imply that a firm has antitrust market power
- that is, perfect competition is not the appropriate benchmark against which antitrust
market power should be assessed.
Dennis W. Carlton & Michael Waldman, The Strategic Use of Tying to Preserve and Create
Market Power in Evolving Industries, 33 RAND J. ECON. 194 (2002).
Carlton and Waldman develop a model that assesses tying strategies in industries that are
undergoing rapid technological change. They find that a monopolist that ties its product to
a complementary product can deter entry into its market. Also, they find that tying can
allow for a monopolist.
Evans, D. and M. Salinger, Why Do Firms Bundle and Tie? Evidence from Competitive Markets
and Implications for Tying Law, 22 YALE J. REG. 37 (2005).
Evans and Salinger recognize that the leading explanations for tying relates to price
discrimination and foreclosure of competition. However, these theories do not explain the
prevalence of tying that is seen in markets in which firms do not have substantial market
power. A more plausible explanation for tying and bundling are the efficiencies (cost
savings) generated, especially in markets in which fixed costs from offering a bundled
product are large relative to demand for the unbundled product.
E. Resale Price Maintenance
Kenneth G. Elzinga & David E. Mills, Leegin and Procompetitive Resale Price Maintenance,
55 ANTITRUST BULL. 349 (2010).
This paper reviews resale price maintenance in light of the Supreme Court's decision in
Leegin, and assesses the competitive implications of Leegin's Suggested Retail Price
Policy. This article provides an economic explanation for Resale Price Maintenance
(RPM), such that RPM may reduce intrabrand competition, but can increase services and
thus interbrand competition. However, RPM can be anticompetitive if used in the
formation and maintenance of cartels, via foreclosure of competitors by the upstream firm,
or when requested by a dominant distributor to slow innovation.
VII.
Auctions and Bid-Rigging
A. Overview
PAUL KLEMPERER, AUCTIONS: THEORY AND PRACTICE (2004), available at
HTTP://WWW.NUFF.OX.AC.UK/USERS/KLEMPERER/VIRTUALBOOK/VBCREVISEDV2.ASP.
This is an excellent non-technical survey of the auctions literature with comprehensible
explanations for the most important topics in auction theory. The author identifies and
describes the key papers in the subject, so this is a great place to start for readers with
varying technical backgrounds. He also provides more technical descriptions in the
appendices.
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R. Preston McAfee & Michael A. Williams, Auctions and Bid Rigging, in ROGER D. BLAIR &
DANIEL SOKOL, OXFORD HANDBOOK ON INTERNATIONAL ANTITRUST ECONOMICS (Forthcoming
2014), available at http://vita.mcafee.cc/PDF/Bidrigging.pdf.
This is another nice auctions literature review with a focus on bid-rigging.
Paul Milgrom, Auctions and Bidding: A Primer, 3 J. ECON. PERSPECTIVES 3 (1989).
Though less comprehensive than the first two surveys listed here, this offers a good
introduction of auction theory from an important author in the space.
*R. Preston McAfee and John McMillan, Auctions and Bidding, 15 J. ECON. LIT. 699 (1987).
This paper can get fairly technical in some places, but for the most part offers a readable
and thorough survey of the theoretical and empirical literature.
*Eric Maskin & John G. Riley, Auction Theory with Private Values, 75 AM. ECON. REV. 150
(1985).
The authors work through the benchmark auction model and the Revenue Equivalence
Theorem, and then relax some of the main assumptions in a simple two bidder model. It
offers a nice illustration of some of the main concepts in auction theory.
*John G. Riley & William F. Samuelson, Optimal Auctions, 71 AM. ECON. REV. 381 (1981).
One of the seminal papers in the field, the authors discuss auction design within the basic
auction framework proposed by William Vickrey in his seminal 1962 paper. In doing so,
they outline the implications of various auction designs. Roger Myerson’s 1981 Optimal
Auction Design presents independent work on the same topic and provides an alternative
to this selection.
B. Auctions Applied to Antitrust
PAUL KLEMPERER, Competition Policy in Auctions and ‘Bidding Markets’, in HANDBOOK OF
ANTITRUST ECONOMICS (2008).
Though at times redundant with his AUCTIONS: THEORY AND PRACTICE, Klemperer
provides a comprehensive overview of “bidding markets” and how they are applied,
sometimes erroneously, to antitrust analyses of competition. Some of his stronger views
may be debated, but he raises the important issues and his bibliography alone is an
excellent resource.
Luke M. Froeb & Mikhael Shor, Auction Models, in ABA SECTION OF ANTITRUST LAW
ECONOMETRICS: LEGAL, PRACTICAL, AND TECHNICAL ISSUES (2005).
This paper describes some of quantitative analyses one may attempt in an antitrust setting.
Gregory Werden & Luke Froeb, Unilateral Competitive Effects of Horizontal Mergers II:
Auctions and Bargaining, in ABA SECTION OF ANTITRUST, ISSUES IN COMPETITION LAW AND
POLICY (2008).
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This chapter examines unilateral effects from mergers in the context of auctions and
bargaining. There is some discussion of the how to apply auction models to the data and
evaluate the fit.
C. Collusion and Bid Rigging
Patrick Bajari & Garrett Summers, Detecting Collusion in Procurement Auctions, 70 ANTITRUST
L. J. 143 (2002).
This paper proposes an empirical approach to test for collusion in bidding situations. After
establishing expected outcomes in auctions with competitive behavior, one can test for
behavior that is different. The empirical tests are appealing, but the authors are upfront
about the shortcomings of such an approach.
ROBERT C. MARSHALL & LESLIE M. MARX, THE ECONOMICS OF COLLUSION: CARTELS AND
BIDDING RINGS (2012).
The authors describe collusive bidding within different auction set-ups and explain how
auction design can affect the success of the bidding ring. The book is structured with an
introductory narrative that eases the reader into the lengthier economic discussion.
*R. Preston McAfee & Michael A. Williams, Bidding Rings, 82 AM. ECON. REV. 579 (1992).
This is a technical treatment of coordinated bidding strategies. The main point of the paper
is to model a cartel’s optimal mechanism for determining how to distribute the surplus
among members, but in doing so it offers a nice overview of bid rigging and speaks to
issues of entry deterrence and seller responses.
D. Applications
*Patrick Bajari & Ali Hortacsu, Winner Curse, Reserve Prices and Endogenous Entry:
Empirical Insights from eBay Auctions, 34 RAND J. ECON. 329 (2003).
The authors specify a bidding model and, using data from eBay, estimate the parameters of
the model so that they can estimate seller revenue under different reservation prices. It is a
good example of how economists empirically approach auction models and shows how the
details of the auction design can significantly impact the reults.
Peter Cramton & Jesse Schwartz, Collusive Bidding in the FCC Spectrum Auctions, 17
CONTRIBUTIONS TO ECON. ANALYSIS & POL’Y 229 (2002).
There are many studies of FCC spectrum auctions available, but this paper offers a good
overview of collusive bidding in FCC spectrum auctions and discusses solutions to curb
anticompetitive practices in a straightforward way.
*Robert H. Porter & J. Douglas Zona, Ohio School Milk Markets: An Analysis of Bidding, 30
RAND J. ECON. 263 (1999).
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This paper tests for collusion and estimates damages for the allegedly collusive bidding for
Ohio school milk contracts. The authors present a straight forward methodology for
evaluating the anticompetitive behavior in this paper.
*Catherine Wolfram, Strategic Bidding in a Multiunit Auction: An Empirical Analysis of Bids to
Supply Electricity in England and Wales, 29 RAND J. ECON. 703 (1998).
In an attempt to identify strategic bidding in procurement auctions where more than one
unit is sold, the author examines bids in cases where the firm is more likely to be the
marginal bidder and finds they are typically higher. This offers one empirical approach to
identifying supracompetitive pricing in an auction setting.
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