Debarment and collusion in procurement auctions

Arbeitspapier

This paper explores the impact of debarment as a deterrent of collusion in first-price procurement auctions. We develop a procurement auction model where bidders can form bidding rings, and derive the bidding and collusive behavior under no sanction, debarment and fines. The model's predictions are tested through a lab experiment. We find that debarment and fines both reduce collusion and bids. The deterrent effect of debarment increases in its length. However, the debarment of colluding bidders reduces effciency and increases the bids of non-debarred bidders. The latter suggests that the market size reduction resulting from debarment may trigger tacit collusion.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers of the Max Planck Institute for Research on Collective Goods ; No. 2018/5

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Group Behavior ; Auctions ; Antitrust Law ; Illegal Behavior and the Enforcement of Law
• Subject: debarment ; collusion ; procurement auctions ; procurement law ; sanctions

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cerrone, Claudia ; Hermstrüwer, Yoan ; Robalo, Pedro
• Event: Veröffentlichung
• (who): Max Planck Institute for Research on Collective Goods
• (where): Bonn
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/194174
• Last update: 10.03.2025, 11:47 AM CET