Detecting Large-Scale Collusion in Procurement Auctions

53 Pages Posted: 17 Jul 2014

See all articles by Kei Kawai

Kei Kawai

University of California at Berkeley

Jun Nakabayashi

Kindai University

Date Written: May 28, 2014

Abstract

This paper documents evidence of widespread collusion among construction firms using a novel dataset covering most of the construction projects procured by the Japanese national government from 2003 to 2006. By examining rebids that occur for auctions when all (initial) bids fail to meet the reserve price, we identify collusion using ideas similar to regression discontinuity. We identify about 1,000 firms whose conduct is inconsistent with competitive behavior. These bidders were awarded about 7,600 projects, or close to one fifth of the total number of construction projects in our sample. The value of these projects totals about $8.6 billion.

Keywords: Collusion, Procurement Auctions, Antitrust

JEL Classification: D44, H57, K21, L12

Suggested Citation

Kawai, Kei and Nakabayashi, Jun, Detecting Large-Scale Collusion in Procurement Auctions (May 28, 2014). Available at SSRN: https://ssrn.com/abstract=2467175 or http://dx.doi.org/10.2139/ssrn.2467175

Kei Kawai (Contact Author)

University of California at Berkeley ( email )

Berkeley, CA 94720
United States

Jun Nakabayashi

Kindai University ( email )

Kowakae 3-4-1
Higashiosaka, Osaka 522-8502
Japan

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