Collusion Detection in Procurement Auctions

Posted by D. Daniel Sokol

Ilya Morozov, National Research University Higher School of Economics and Elena A. Podkolzina, National Research University Higher School of Economics addressCollusion Detection in Procurement Auctions.

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.