Collusion detection in procurement auctions
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.
|Date of creation:||2013|
|Date of revision:|
|Publication status:||Published in WP BRP Series: Economics / EC, February 2013, pages 1-36|
|Contact details of provider:|| Postal: Myasnitskaya 20, Moscow 101000|
Web page: http://www.hse.ru/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marshall, R.C. & Richard J.F., 1995.
"Bider Collusion at Forest Service Timber Sales,"
7-95-3, Pennsylvania State - Department of Economics.
- Harris, Milton & Raviv, Artur, 1981. "Allocation Mechanisms and the Design of Auctions," Econometrica, Econometric Society, vol. 49(6), pages 1477-99, November.
- Ishii, Rieko, 2009. "Favor exchange in collusion: Empirical study of repeated procurement auctions in Japan," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 137-144, March.
- Patrick Bajari & Lixin Ye, 2003.
"Deciding Between Competition and Collusion,"
The Review of Economics and Statistics,
MIT Press, vol. 85(4), pages 971-989, November.
- Jofre-Bonet, Mireia & Pesendorfer, Martin, 2000. "Bidding behavior in a repeated procurement auction: A summary," European Economic Review, Elsevier, vol. 44(4-6), pages 1006-1020, May.
- A. Banerji & J.V. Meenakshi, 2004.
"Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 86(1), pages 236-253.
- A. Banerji and J.V.Meenakshi & J.V.Meenakshi, 2002. "Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis," Working papers 104, Centre for Development Economics, Delhi School of Economics.
- Hopenhayn, Hugo A. & Skrzypacz, Andrzej, 2001.
"Tacit Collusion in Repeated Auctions,"
1698r2, Stanford University, Graduate School of Business.
- Brannman, Lance & Klein, J Douglass & Weiss, Leonard W, 1987. "The Price Effects of Increased Competition in Auction Markets," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 24-32, February.
- Paulo K. Monteiro & Flavio M. Menezes, 2000. "original papers : Auctions with endogenous participation," Review of Economic Design, Springer;Society for Economic Design, vol. 5(1), pages 71-89.
- Robert H. Porter & J. Douglas Zona, 1997.
"Ohio School Milk Markets: An Analysis of Bidding,"
NBER Working Papers
6037, National Bureau of Economic Research, Inc.
- McAfee, R Preston & McMillan, John, 1992.
American Economic Review,
American Economic Association, vol. 82(3), pages 579-99, June.
- Porter, Robert H & Zona, J Douglas, 1993.
"Detection of Bid Rigging in Procurement Auctions,"
Journal of Political Economy,
University of Chicago Press, vol. 101(3), pages 518-38, June.
- Srabana Gupta, 2001. "The Effect of Bid Rigging on Prices: A Study of the Highway Construction Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(4), pages 451-465, December.
- 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.
- Hendricks, Kenneth & Porter, Robert H, 1988. "An Empirical Study of an Auction with Asymmetric Information," American Economic Review, American Economic Association, vol. 78(5), pages 865-83, December.
- Patrick Bajari, 2001. "Comparing competition and collusion: a numerical approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 18(1), pages 187-205.
- William S. Comanor & Mark A. Schankerman, 1976. "Identical Bids and Cartel Behavior," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 281-286, Spring.
- Holt, Charles A, Jr, 1979. "Uncertainty and the Bidding for Incentive Contracts," American Economic Review, American Economic Association, vol. 69(4), pages 697-705, September.
- Anna Zarkada-Fraser & Martin Skitmore, 2000. "Decisions with moral content: collusion," Construction Management and Economics, Taylor & Francis Journals, vol. 18(1), pages 101-111.
- Feinstein, Jonathan S & Block, Michael K & Nold, Frederick C, 1985. "Asymmetric Information and Collusive Behavior in Auction Markets," American Economic Review, American Economic Association, vol. 75(3), pages 441-60, June.
When requesting a correction, please mention this item's handle: RePEc:hig:wpaper:25/ec/2013. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamil Abdulaev)or (Victoria Elkina)
If references are entirely missing, you can add them using this form.