Collusion in Repeated Procurement Auction: A Study of a Paving Market in Japan
Institute of Social and Economic Research
ISER Discussion Paper No. 710
We examine auction data to determine if bid rigging presents in procurement auctions for paving works in Ibaraki City, Osaka, Japan. We first show that sporadic bidding wars are caused by the participation ofpotential outsiders. Assuming that the ring is all-inclusive if the auction is not the bidding war, we estimate the scheme by which the ring allocates a win to its members. It is found that the ring tends to select a bidder whose winless period is long and whose winning amount in the past is small relative to other bidders.
Number of Pages in PDF File: 29
Keywords: Bid rigging, repeated auction
JEL Classification: D44, H57, L44
Date posted: June 19, 2008