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Detecting Collusion through Exchange of Favors in Repeated Procurement Auctions

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  • Rieko Ishii

    ()
    (Institute of Social and Economic Research, Osaka University)

Abstract

It is known that bid rigging in public-work auctions in Japan often takes the form of exchanging favors. In such a scheme, the winner is designated based on the amount of favor he has given to other members of the ring. By explicitly modeling gfavorh as an explanatory variable, this paper analyzes data from the public-works auctions for consulting works in Naha, Japan, to confirm that such a collusion scheme is in operation.

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File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0715.pdf
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Bibliographic Info

Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 07-15.

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Length: 25 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:osk:wpaper:0715

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Web page: http://www.econ.osaka-u.ac.jp/
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Keywords: Bid rigging; repeated auction.;

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  1. Aoyagi, Masaki, 2003. "Bid rotation and collusion in repeated auctions," Journal of Economic Theory, Elsevier, vol. 112(1), pages 79-105, September.
  2. McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Mark Duggan & Steven D. Levitt, 2000. "Winning Isn't Everything: Corruption in Sumo Wrestling," NBER Working Papers 7798, National Bureau of Economic Research, Inc.
  4. Hopenhayn, Hugo A. & Skrzypacz, Andrzej, 2001. "Tacit Collusion in Repeated Auctions," Research Papers 1698r2, Stanford University, Graduate School of Business.
  5. Pesendorfer, Martin, 2000. "A Study of Collusion in First-Price Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 381-411, July.
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