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Coordination in the Fight Against Collusion

Author

Listed:
  • Rey, Patrick
  • Iossa, Elisabetta
  • Loertscher, Simon
  • Marx, Leslie

Abstract

While antitrust authorities strive to detect, prosecute, and thereby deter collusive conduct, entities harmed by that conduct are also advised to pursue their own strategies to deter collusion. The implications of such delegation of deterrence have largely been ignored, however. In a procurement context, we find that buyers may prefer to accommodate rather than deter collusion among their suppliers. We also show that a multi-market buyer, such as a centralized procurement authority, may optimally deter collusion when multiple independent buyers would not, consistent with the view that “large” buyers are less susceptible to collusion.

Suggested Citation

  • Rey, Patrick & Iossa, Elisabetta & Loertscher, Simon & Marx, Leslie, 2023. "Coordination in the Fight Against Collusion," TSE Working Papers 23-1441, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:128130
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    References listed on IDEAS

    as
    1. Joseph E. Harrington, Jr, 2006. "How Do Cartels Operate?," Economics Working Paper Archive 531, The Johns Hopkins University,Department of Economics.
    2. Marx, Leslie M., 2017. "Defending against potential collusion by your suppliers—26th Colin Clark Memorial Lecture," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 123-128.
    3. Sylvain Chassang & Juan Ortner, 2019. "Collusion in Auctions with Constrained Bids: Theory and Evidence from Public Procurement," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2269-2300.
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    5. Marhsall, Robert C. & Marx, Leslie M., 2014. "The Economics of Collusion: Cartels and Bidding Rings," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525941, April.
    6. Harrington, Joseph E., 2006. "How Do Cartels Operate?," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(1), pages 1-105, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Collusion; Cartel; Auction; Procurement; Reserves; Sustainability and initiation of collusion; Coordinated effects;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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