Detection of Collusive Networks in E-procurement
43 Pages Posted: 21 Jun 2021
Date Written: June 10, 2021
Collusion likely has adverse effects on social welfare. In this paper, we study collusion in the e-procurement market in Ukraine. We document that the bidding patterns in the data are incompatible with a competitive equilibrium. We develop a novel structural test to detect pairs and, thereby, networks of collusive firms. We validate the soundness of our collusion detection algorithm on a sample of 863 prosecuted collusive firms that participated in 23,515 tenders.
Keywords: Public procurement, Collusion, Online markets
JEL Classification: D44, H57
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