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Collusion detection in procurement auctions

Author

Listed:
  • Ilya Morozov

    (International Laboratory for Institutional Analysis of Economic Reforms)

  • Elena Podkolzina

    (International Laboratory for Institutional Analysis of Economic Reforms)

Abstract

This paper proposes a method of bid-rigging detection, which allows us to reveal cartels in procurement auctions without any prior knowledge of the market structure. We apply it to data on highway construction procurements in one of the Russian regions and show that five suppliers demonstrated passive bidding behavior, which is consistent with the so called ‘rotating bidding’ scheme of collusion. The suggested methodology can be potentially used by both researchers and anti-trust agencies for cartel disclosure in various markets.

Suggested Citation

  • Ilya Morozov & Elena Podkolzina, 2013. "Collusion detection in procurement auctions," HSE Working papers WP BRP 25/EC/2013, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:25/ec/2013
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    References listed on IDEAS

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    Cited by:

    1. Andrey Yakovlev & Aleksandra Bashina & Olga Demidova, 2014. "The effectiveness of simple homogeneous commodity procurement under rigid govermental regulation: the case of granulated sugar procurement in Russia," HSE Working papers WP BRP 13/PA/2014, National Research University Higher School of Economics.
    2. Berardino Cesi & Adriano Di Natale, 2019. "Transparency in repeated procurement: when hiding is better," Economics Bulletin, AccessEcon, vol. 39(1), pages 14-23.
    3. In Lee & Kyungdong Hahn, 2002. "Bid-Rigging in Auctions for Korean Public-Works Contracts and Potential Damage," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 21(1), pages 73-88, August.

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    More about this item

    Keywords

    Bid-rigging; Tacit collusion; Public procurement; Cartel; Open auction.;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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