The English auction is susceptible to tacit collusion when post-auction interbidder resale is allowed. We show this by constructing equilibria where, with positive probability, one bidder wins the auction without any competition and divides the spoils by optimally reselling the good to the other...

A model of English auctions is proposed to incorporate the possibility of jump bidding. When two objects are sold separately via such auctions, bidders signal their willingness to pay via jump bids, thereby forming rational expectations of the prices without relying on any central mediator....