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Using The Spatial Distribution Of Bidders To Detect Collusion In The Marketplace: Evidence From Timber Auctions

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  • Michael K. Price

Abstract

ABSTRACT This study develops identification strategies utilizing spatial bidding patterns to detect possible collusion in auction markets. The identification strategy is applied to examine bidder behavior using data drawn from nearly 3,000 auctions (over 10,000 individual bids) for cutting rights of standing timber in British Columbia for the period 1996–2000. Results suggest that observed patterns of behavior are inconsistent with a model of perfectly competitive bidding. Further, changes in such patterns across geographic space are remarkably consistent with patterns of decay in the transmission of knowledge reported in previous empirical work on spillovers.

Suggested Citation

  • Michael K. Price, 2008. "Using The Spatial Distribution Of Bidders To Detect Collusion In The Marketplace: Evidence From Timber Auctions," Journal of Regional Science, Wiley Blackwell, vol. 48(2), pages 399-417, May.
  • Handle: RePEc:bla:jregsc:v:48:y:2008:i:2:p:399-417
    DOI: 10.1111/j.1467-9787.2008.00557.x
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    Cited by:

    1. Estache, Antonio & Iimi, Atsushi, 2011. "(Un)bundling infrastructure procurement: Evidence from water supply and sewage projects," Utilities Policy, Elsevier, vol. 19(2), pages 104-114, June.
    2. Granlund, David & Rudholm, Niklas, 2023. "Calculating the probability of collusion based on observed price patterns," Umeå Economic Studies 1014, Umeå University, Department of Economics, revised 13 Oct 2023.
    3. Kumbhakar, Subal C. & Parmeter, Christopher F. & Tsionas, Efthymios G., 2012. "Bayesian estimation approaches to first-price auctions," Journal of Econometrics, Elsevier, vol. 168(1), pages 47-59.
    4. Antonio Estache & Atsushi Iimi, 2012. "Quality or Price? Evidence from ODA-Financed Public Procurement," Public Finance Review, , vol. 40(4), pages 435-469, July.
    5. Antonio Estache & Atsushi Iimi, 2009. "Joint Bidding, Governance And Public Procurement Costs:A Case Of Road Projects," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 80(3), pages 393-429, September.
    6. Han, Xiao & Kant, Shashi & Xie, Yi, 2018. "A spatial hedonic stumpage analysis of standing timber auctions in Jiangxi Province of China," Forest Policy and Economics, Elsevier, vol. 96(C), pages 63-74.
    7. Estache, Antonio & Iimi, Atsushi, 2009. "Auctions with endogenous participation and quality thresholds : evidence from ODA infrastructure procurement," Policy Research Working Paper Series 4853, The World Bank.
    8. David Barrus & Frank Scott, 2020. "Single Bidders and Tacit Collusion in Highway Procurement Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 68(3), pages 483-522, September.
    9. Xiaowei Wang & Wuyan Long & Meiyue Sang & Yang Yang, 2022. "Towards Sustainable Urbanization: Exploring the Influence Paths of the Urban Environment on Bidders’ Collusive Willingness," Land, MDPI, vol. 11(2), pages 1-14, February.
    10. Xiaowei Wang & Kunhui Ye & Taozhi Zhuang & Rui Liu, 2022. "The Influence of Collusive Information Dissemination on Bidder’s Collusive Willingness in Urban Construction Projects," Land, MDPI, vol. 11(5), pages 1-14, April.

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