IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v8y2016i2p1-38.html
   My bibliography  Save this article

Detecting Bidders Groups in Collusive Auctions

Author

Listed:
  • Timothy G. Conley
  • Francesco Decarolis

Abstract

We study entry and bidding in procurement auctions where contracts are awarded to the bid closest to a trimmed average bid. These auctions, common in public procurement, create incentives to coordinate bids to manipulate the bid distribution. We present statistical tests to detect coordinated entry and bidding choices. The tests perform well in a validation dataset where a court case makes coordination observable. We use the tests to detect coordination in a larger dataset where it is suspected, but not known. The results are used to interpret a major market shakeout following a switch to first price auctions. (JEL D44, D47, H57, R42)

Suggested Citation

  • Timothy G. Conley & Francesco Decarolis, 2016. "Detecting Bidders Groups in Collusive Auctions," American Economic Journal: Microeconomics, American Economic Association, vol. 8(2), pages 1-38, May.
    • Handle: RePEc:aea:aejmic:v:8:y:2016:i:2:p:1-38
    Note: DOI: 10.1257/mic.20130254
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/articles?id=10.1257/mic.20130254
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/mic/data/0802/2013-0254_data.zip
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/mic/app/0802/2013-0254_app.pdf
    Download Restriction: no
    File URL: https://www.aeaweb.org/aej/mic/ds/0802/2013-0254_ds.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Detecting Bidders Groups in Collusive Auctions (AEJ:MI 2016) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:8:y:2016:i:2:p:1-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.