We study optimal bidder collusion at first-price auctions when the collusive mechanism only relies on signals about bidders’ valuations. We build on Fang and Morris (2006) when two bidders have low or high private valuation of a single object and additionally receive a private noisy signal from an incentiveless center about their opponents’ valuations.

We investigate the general case when the signals are chosen conditionally independently and identically out of n≥ 2 possible values. We demonstrate a symmetric equilibrium of the first price auction with public or private signals. We characterize the signal structure which provides the least revenue for the seller for arbitrary n. As a corollary, we show that bidders are strictly better off as signals can take on more and more possible values. Nevertheless, we provide an example which shows that the seller’s revenue drops below the above optima even with only 2, but correlated signals. Finally, we show that in case the center does not know the bidders’ valuations, bidders have no incentives to report their types truthfully to the center. As a corollary: no collusive cheap talk equilibrium exists. In this sense the first price auction turns out to be collusion-proof.