On cartel detection and Moran’s I

Johan Lundberg

Letters in Spatial and Resource Sciences, 2017, vol. 10, issue 1, No 9, 129-139

Abstract: Abstract This paper explores the potential of using the Moran’s I statistic to detect complementary bidding on public contracts. The test is applied to data concerning the so-called Swedish asphalt cartel, which was discovered in 2001. Using information on submitted bids and procurement characteristics for both the cartel period (1995–2001) and the post-cartel period (2003–2009), the Moran’s I correctly predicts complementary bidding behavior for linear and quadratic specifications when such behavior is likely to exist, and rejects such behavior when it’s unlikely to be present. Remarkably, the Moran’s I also correctly indicates and rejects complementary bidding on the basis of information on the separate bids alone.

Keywords: Antitrust; Auction; Cartel and collusion; Complementary bidding; Public procurement; Spatial econometrics (search for similar items in EconPapers)
JEL-codes: D44 H57 L10 L40 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s12076-016-0176-4

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