Debarment and Collusion in Procurement Auctions

Claudia Cerrone and Yoan Hermstrüwer (hermstruewer@coll.mpg.de)
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Yoan Hermstrüwer: Max Planck Institute for Research on Collective Goods

No 2018_05, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: This article presents the first experiment exploring the impact of debarments – the exclusion of colluding bidders – on collusion in procurement auctions. We find that debarments reduce collusion and bids relative to a market with no sanction. The deterrent effect of debarments increases in the length of the punishment. However, shorter debarments reduce efficiency and increase the bids of non-debarred bidders. This suggests that debarments that are too lenient may trigger tacit collusion among the bidders who remain in the market, thereby facilitating the very behavior they aim to deter.

Keywords: debarment; collusion; procurement auctions; procurement law; sanctions (search for similar items in EconPapers)
JEL-codes: C92 D03 D44 K21 K42 (search for similar items in EconPapers)
Date: 2018-04, Revised 2021-04
New Economics Papers: this item is included in nep-com, nep-des, nep-exp, nep-gth and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Debarment and collusion in procurement auctions (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2018_05

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