Detecting Bidders Groups in Collusive Auctions
American Economic Journal: Microeconomics
vol. 8,
no. 2, May 2016
(pp. 1-38)
Abstract
We study entry and bidding in procurement auctions where contracts are awarded to the bid closest to a trimmed average bid. These auctions, common in public procurement, create incentives to coordinate bids to manipulate the bid distribution. We present statistical tests to detect coordinated entry and bidding choices. The tests perform well in a validation dataset where a court case makes coordination observable. We use the tests to detect coordination in a larger dataset where it is suspected, but not known. The results are used to interpret a major market shakeout following a switch to first price auctions. (JEL D44, D47, H57, R42)Citation
Conley, Timothy G., and Francesco Decarolis. 2016. "Detecting Bidders Groups in Collusive Auctions." American Economic Journal: Microeconomics, 8 (2): 1-38. DOI: 10.1257/mic.20130254Additional Materials
JEL Classification
- D44 Auctions
- D47 Market Design
- H57 National Government Expenditures and Related Policies: Procurement
- R42 Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
There are no comments for this article.
Login to Comment