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e study the competition between two owners of identical goods who wish to sell them to a pool of potential buyers. The sellers compete simultaneously setting reserve prices for their second price sealed bid auctions. Upon observing the set reserve prices, the buyers decide simultaneously in which auction to bid.Ž . We show that this game has at least one equilibrium and that all equilibria Ž . are inefficient: reserve prices are not driven to zero cost . We also discuss where and why the parallel between optimal auction design and optimal pricing in the case of monopoly breaks down for oligopoly. * Manuscript

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We consider a model of bribery in an asymmetric procurement auction. In return for a bribe from the dishonest supplier, the auctioneer has the discretion to allow this supplier to revise his bid downward to match the low bid of the honest supplier. The dishonest supplier can also win the contract outright without paying a bribe by bidding below the honest supplier. We investigate the effect of the bribe share and the cost distributions on the bidding functions, the allocative distortion, and the expected price paid by the buyer. The dishonest supplier bids more aggressively to win the contract outright when the auctioneer takes a larger bribe share. Bribery and the implied right of first refusal introduce a new allocative distortion in favor of the dishonest supplier. Finally, we use the power family of cost distributions to examine the expected price paid by the buyer. When the dishonest supplier has a more favorable cost distribution, there exist bribe shares sufficiently large such that the expected price paid by the buyer can actually decline as a result of bribery.

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