Detection of Collusive Networks in Multistage Auctions

Bruno Baránek, Leon Musolff and Vitezslav Titl

No 12073, CESifo Working Paper Series from CESifo

Abstract: We develop a method for detecting cartels in multistage auctions. Our approach allows a firm to be collusive when facing members of its cartel yet competitive when facing others. Intuitively, as initial bids are shaded, close initial bids not only imply similar costs but also provide an incentive to undercut. We detect firm pairs that ignore this incentive when facing each other. Our algorithm predicts Ukraine’s Antimonopoly Committee’s sanctions: firm pairs classified as collusive are 8.98 times more likely (standard error 2.65 times) to be sanctioned. It also uncovers additional collusion: 1,857 collusive firms participate in 15.57% of auctions, increasing costs by 1.95%.

Keywords: public procurement; collusion; online markets (search for similar items in EconPapers)
JEL-codes: D44 H57 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12073

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