Debarment and Collusion in Procurement Auctions

52 Pages Posted: 3 May 2018 Last revised: 29 Apr 2021

See all articles by Claudia Cerrone

Claudia Cerrone

Middlesex University

Yoan Hermstrüwer

Max Planck Institute for Research on Collective Goods; University of Bonn - Department of Law

Pedro Brito Robalo

Max Planck Institute, Bonn

Date Written: April 29, 2021

Abstract

This article presents the first experiment exploring the impact of debarments - the exclusion of colluding bidders - on collusion in procurement auctions. We find that debarments and their most common alternative, fines, reduce collusion and bids relative to a market with no sanction. The deterrent effect of debarments increases in their length. However, shorter debarments reduce efficiency and increase the bids of non-debarred bidders. This suggests that debarments that are too lenient may trigger tacit collusion among the bidders who remain in the market, thereby facilitating the very behavior they aim to deter.

Keywords: debarment, collusion, procurement auctions, sanctions

JEL Classification: C92, D03, D44, K21, K42

Suggested Citation

Cerrone, Claudia and Hermstrüwer, Yoan and Robalo, Pedro Brito, Debarment and Collusion in Procurement Auctions (April 29, 2021). MPI Collective Goods Discussion Paper, No. 2018/5, Available at SSRN: https://ssrn.com/abstract=3172826 or http://dx.doi.org/10.2139/ssrn.3172826

Claudia Cerrone (Contact Author)

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Yoan Hermstrüwer

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Bonn - Department of Law ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

Pedro Brito Robalo

Max Planck Institute, Bonn ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

HOME PAGE: http://www.coll.mpg.de/team/page/pedro_robalo

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