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Favor exchange in collusion: Empirical study of repeated procurement auctions in Japan

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  • Ishii, Rieko

Abstract

It is known that bid rigging in public-work auctions in Japan often takes the form of exchanging favors. In such a scheme, the winner is designated based on favors he has given to other ring members. By explicitly modeling "favor" as an explanatory variable, this paper analyzes data from the public-works auctions for consulting works in Naha, Japan, to confirm that such a collusion scheme is in operation.

Suggested Citation

  • Ishii, Rieko, 2009. "Favor exchange in collusion: Empirical study of repeated procurement auctions in Japan," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 137-144, March.
    • Handle: RePEc:eee:indorg:v:27:y:2009:i:2:p:137-144
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    References listed on IDEAS

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      • McAfee, R. Preston & McMillan, John., 1990. "Bidding Rings," Working Papers 726, California Institute of Technology, Division of the Humanities and Social Sciences.
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    6. Rieko Ishii, 2007. "Collusion in Repeated Procurement Auction: a Study of Paving Market in Japan," Discussion Papers in Economics and Business 07-16, Osaka University, Graduate School of Economics.
    7. Skrzypacz, Andrzej & Hopenhayn, Hugo, 2004. "Tacit collusion in repeated auctions," Journal of Economic Theory, Elsevier, vol. 114(1), pages 153-169, January.
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