Screening for bid-rigging - does it work?

David Imhof, Yavuz Karagök and Samuel Rutz

No 468, FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland

Abstract: This paper proposes a method to detect bid-rigging by applying mutually reinforcing screens to a road construction procurement data set from Switzerland in which no prior information about collusion was available. The screening method is particularly suited to deal with the problem of partial collusion, i.e. collusion which does not involve all firms and/or all contracts in a specific data set, implying that many of the classical markers discussed in the corresponding literature will fail to identify bid-rigging. In addition to presenting a new screen for collusion, it is shown how benchmarks and the combination of different screens may be used to identify subsets of suspicious contracts and firms in a data set. The discussed screening method succeeds in isolating a group of “suspicious” firms exhibiting the characteristics of a local bid-rigging cartel operating with cover bids and a – more or less pronounced – bid rotation scheme. Based on these findings the Swiss Competition Commission (ComCo) decided to open an investigation.

Keywords: bid-rigging; screening method; variance screen; cover bidding screen; bid rotation test; partial collusion (search for similar items in EconPapers)
JEL-codes: C00 C40 D22 D40 K40 L40 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2016-04-07
New Economics Papers: this item is included in nep-com and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://doc.rero.ch/record/259164/files/WP_SES_468.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fri:fribow:fribow00468

Ordering information: This working paper can be ordered from
http://doc.rero.ch/record/259164

Access Statistics for this paper

More papers in FSES Working Papers from Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland Bd de Pérolles 90, CH-1700 Fribourg. Contact information at EDIRC.
Bibliographic data for series maintained by Mustapha Obbad ().