Problem 11.1 In Section 11.3 above, Ben chose to hold an English auction rather than a first price sealed-bid auction, in order to avoid collusion between the auctioneer and a bidder. Show, using examples for a first-price sealed-bid auction, that:

(a)

(b)

It is possible for Ben to gain from such collusion.

It is possible for Ben to lose from such collusion.

On balance, do you think it is more likely that Ben would gain or lose from such collusion?