Debarment and collusion in procurement auctions

Cerrone, Claudia ORCID: https://orcid.org/0000-0003-1551-6723, Hermstruewer, Yoan and Robalo, Pedro (2021) Debarment and collusion in procurement auctions. Games and Economic Behavior, 129 . pp. 114-143. ISSN 0899-8256 [Article] (doi:10.1016/j.geb.2021.05.011)

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Abstract

This article presents the first experiment exploring the impact of debarments – the exclusion of colluding bidders – on collusion in procurement auctions. We find that debarments reduce collusion and bids relative to a market with no sanction. The deterrent effect of debarments increases in the length of the punishment. However, shorter debarments reduce efficiency and increase the bids of non-debarred bidders. This suggests that debarments that are too lenient may trigger tacit collusion among the bidders who remain in the market, thereby facilitating the very behavior they aim to deter.

Item Type: Article
Research Areas: A. > Business School > Economics
Item ID: 33390
Notes on copyright: © 2021. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Useful Links:
Depositing User: Claudia Cerrone
Date Deposited: 09 Jun 2021 11:32
Last Modified: 10 Jun 2021 16:42
URI: https://eprints.mdx.ac.uk/id/eprint/33390

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