Interactions Across Firms and Bid Rigging

Mats A. Bergman, Johan Lundberg, Sofia Lundberg and Johan Stake
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Mats A. Bergman: Södertörn University – Stockholm
Sofia Lundberg: Umeå University

Review of Industrial Organization, 2020, vol. 56, issue 1, No 6, 107-130

Abstract: Abstract We evaluate whether an econometric technique that is used in the spatial econometrics and network effects literatures can be adopted as a test for collusive bidding in public procurement auctions. The proposed method is applied to the Swedish asphalt cartel that was discovered in 2001. Our dataset covers the period 1995–2009, which makes it possible to test for conditional independence between complementary cartel bids before and after 2001. Our estimates show a significant positive correlation between complementary cartel bids during the cartel period, whereas a non-significant correlation is shown during the later period. The variance of the parameter estimate of interest also differs between the periods, which suggests a structural change in bidding behavior among cartel members between the two periods.

Keywords: Antitrust; Auction; Cartel and collusion; Complementary bidding; Public procurement; Networks; Spatial econometrics (search for similar items in EconPapers)
JEL-codes: D44 H57 L10 L40 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s11151-018-09676-0

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