Drivers of Market Cartelisation on the Example of Bid-Rigging – Case Study

Łukasz Ziarko () and Justyna Wiktorowicz ()
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Łukasz Ziarko: University of Lodz
Justyna Wiktorowicz: University of Lodz

A chapter in Sustainable Finance in the Green Economy, 2022, pp 249-260 from Springer

Abstract: Abstract Rational spending of public funds is a fundamental duty of public institutions. One of the methods to implement this obligation is to select contractors competitively, like open tender procedures. However, this process may be disrupted by a conspiracy of contractors. In this article, we present the conditions of the existence of a tender cartel, and we give an overview of methods used to identify this type of fraud. On this basis, we will discuss the case of a specific cartel that took place on the Polish market for the supply of bakery products. This cartel stood out from other agreements due to its stability over time (continuity of operating despite the detection and penalisation by the competition authority) and its flexibility. We suspect that a critical condition for the success of this conspiracy is the ability of one undertaking to directly control the other members, similar to the single economic entity case. The results of our study indicate that the list of factors identified in behavioural methods used to detect cartels should be extended to include personal, business and capital links between companies. By such links, we mean family ties, the sharing of assets, the conclusion of networks of mutual agreements and direct and indirect capital dependence. If such circumstances occur between competitors applying for the same contract, it should be considered as a factor increasing the risk of collusion.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-81663-6_19

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DOI: 10.1007/978-3-030-81663-6_19

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