TY  - JOUR
AU  - Porter,Robert H.
AU  - Zona,J. Douglas
TI  - Detection of Bid Rigging in Procurement Auctions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4013
PY  - 1992
Y2  - March 1992
UR  - http://www.nber.org/papers/w4013
L1  - http://www.nber.org/papers/w4013.pdf
N1  - Author contact info:
Robert H. Porter
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-3491
Fax: 847/491-7001
E-Mail: r-porter@northwestern.edu
AB  - This paper examines bidding in auctions for state highway construction contracts on Long Island in the early 1980s, in order to determine whether bid rigging occurred. Detection of collusion is possible because of limited participation in the collusive scheme. The paper looks at differences in behavior between ring members and non-members. In these auctions, collusio did not take the form of a bid rotation scheme, in which only one ring member submits a bid. Instead, several ring members bid on most jobs. The apparent role of ring meetings prior to the auction was to designate a serious bidder, and its bid, and the other firms then frequently submitted phony higher bids. The bidding data indicate that the bids of non-cartel firms, as well as their rank distribution, were related to cost measures, such as how much backlog a firm was carrying. In contrast, the rank distribution of higher cartel bids was unrelated to similar cost measures, and differed from the distribution of the low cartel bid.
ER  -