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Complementary Bidding and the Collusive Arrangement: Evidence from an Antitrust Investigation

Author

Listed:
  • Robert Clark
  • Decio Coviello
  • Adriano De Leverano

Abstract

Clustered bids and a missing mass of nearly tied bids have both been proposed as markers of collusion. We present causal empirical evidence from an actual procurement cartel that bidding involves both clustering and a gap around the winning bid. We support these results with information from the testimony of cartel participants that explains how both patterns arise naturally as part of an arrangement featuring complementary bidding. Based on these findings, we develop an easy-to-implement screen for collusive arrangements featuring complementary bidding.

Suggested Citation

  • Robert Clark & Decio Coviello & Adriano De Leverano, 2025. "Complementary Bidding and the Collusive Arrangement: Evidence from an Antitrust Investigation," American Economic Journal: Microeconomics, American Economic Association, vol. 17(2), pages 66-93, May.
    • Handle: RePEc:aea:aejmic:v:17:y:2025:i:2:p:66-93
    DOI: 10.1257/mic.20210450
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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