Bidder collusion and antitrust law: Refining the analysis of price fixing to account for the special features of auction markets

Courts and commentators have painstakingly analyzed antitrust policy toward horizontal price fixing, but surprisingly, one of the most common forms of price fixing--bidder collusion-has escaped the sustained attention of antitrust lawyers. We attribute this inattention to the mistaken belief that the economics of bidder collusion is essentially equivalent to the economics of price fixing in posted-price markets. However, there are significant differences regarding the economics of collusion in auction and procurement markets as compared to posted-price markets, and we derive antitrust policy recommendations that apply specifically to bidder collusion in this article.