Bid Rigging And Entry Deterrence In Public Procurement: Evidence From An Investigation Into Collusion And Corruption In Quebec

Robert Clark, Decio Coviello, Jean-François Gauthier and Art Shneyerov
Additional contact information
Decio Coviello: HEC Montreal
Art Shneyerov: Concordia University

No 1401, Working Paper from Economics Department, Queen's University

Abstract: We study the impact of an investigation into collusion and corruption to learn about the organization of cartels in public procurement auctions. Our focus is on MontrealÂ’s asphalt industry, where there have been allegations of bid rigging, market segmentation, complementary bidding and bribes to bureaucrats, and where, in 2009, a police investigation was launched. We collect procurement data and use a difference-in-difference approach to compare outcomes before and after the investigation in Montreal and in Quebec City, where there have been no allegations of collusion or corruption. We find that entry and participation increased, and that the price of procurement decreased. We then decompose the price decrease to quantify the importance of two aspects of cartel organization, coordination and entry deterrence, for collusive pricing. We find that the latter explains only a small part of the decrease.

Keywords: Entry deterrence; Collusion; Corruption; Bid rigging (search for similar items in EconPapers)
JEL-codes: D44 H57 L22 L74 (search for similar items in EconPapers)
Pages: 71 pages
Date: 2018-02
New Economics Papers: this item is included in nep-com, nep-des, nep-ind and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1401.pdf First version 2018 (application/pdf)

Related works:
Journal Article: Bid Rigging and Entry Deterrence in Public Procurement: Evidence from an Investigation into Collusion and Corruption in Quebec (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:1401

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