Collusion Detection in Procurement Auctions

36 Pages Posted: 22 Feb 2013 Last revised: 21 Mar 2014

See all articles by Ilya Morozov

Ilya Morozov

Stanford Graduate School of Business

Elena A. Podkolzina

National Research University Higher School of Economics

Date Written: February 21, 2013

Abstract

This paper proposes a method of bid-rigging detection, which allows us to reveal cartels in procurement auctions without any prior knowledge of the market structure. We apply it to data on highway construction procurements in one of the Russian regions and show that five suppliers demonstrated passive bidding behavior, which is consistent with the so called ‘rotating bidding’ scheme of collusion. The suggested methodology can be potentially used by both researchers and anti-trust agencies for cartel disclosure in various markets.

Keywords: bid-rigging, tacit collusion, public procurement, cartel, open auction

JEL Classification: H57, L41, L92

Suggested Citation

Morozov, Ilya and Podkolzina, Elena A., Collusion Detection in Procurement Auctions (February 21, 2013). Higher School of Economics Research Paper No. WP BPR 25/EC/2013. Available at SSRN: https://ssrn.com/abstract=2221809 or http://dx.doi.org/10.2139/ssrn.2221809

Ilya Morozov

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Elena A. Podkolzina (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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