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Detecting Collusion through Exchange of Favors in Repeated Procurement Auctions

  • Rieko Ishii

    ()

    (Institute of Social and Economic Research, Osaka University)

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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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
Contact details of provider: Web page: http://www.econ.osaka-u.ac.jp/
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  1. Hopenhayn, Hugo A. & Skrzypacz, Andrzej, 2001. "Tacit Collusion in Repeated Auctions," Research Papers 1698r2, Stanford University, Graduate School of Business.
  2. McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Pesendorfer, Martin, 2000. "A Study of Collusion in First-Price Auctions," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 381-411, July.
  4. Aoyagi, Masaki, 2003. "Bid rotation and collusion in repeated auctions," Journal of Economic Theory, Elsevier, vol. 112(1), pages 79-105, September.
  5. Mark Duggan & Steven D. Levitt, 2002. "Winning Isn't Everything: Corruption in Sumo Wrestling," American Economic Review, American Economic Association, vol. 92(5), pages 1594-1605, December.
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