• Procurement Conference in Lancaster & collusion in Japanese auctions


    On June 12 & 13, I attended the Conference on “Auctions, competition, regulation, and public policy” , organized by Dakshina Da Silva and Klenio Barbosa, at the Department of Economics of Lancaster University Management School.

    Here is the program, with the sample of papers presented. A special highlight for the paper “Detecting Large‐Scale Collusion in Procurement Auctions” by Kei Kawai (NYU) and Jun Nakabayashi (Tohoku University), which analyzes an extraordinary case of systematic collusion in public procurement in Japan:

    This paper documents evidence of widespread collusion among construction firms participating in procurement auctions in Japan using a novel dataset that accounts for most of the construction projects procured by the Japanese national government from 2003 to 2006. By examining rebids that occur for auctions when all (initial) bids fail to meet the reserve price, we identify collusion using ideas similar to regression discontinuity. We identify about 1,000 firms whose conduct is inconsistent with competitive behavior. These bidders were awarded about 7,600 projects, or close to one fifth of the total number of construction projects in our sample. The value of these projects totals about $8:6 billion, about 8:4% of which may have been saved absent collusion.

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