Public procurement markets differ from all others because quantities do not adjust with prices, but are fixed by the bidding authority. As a result, there is a high incentive for organizing cartels (the price elasticity of demand is zero below the base price) that are quite stable because there...

With a view to reducing the consequences of corruption in public procurement, many governments have introduced debarment of suppliers found guilty of corruption and some other forms of crime. This paper explores the market effects of debarment on public procurement. Debarment is found to make...

This paper examines the question of how a nation can combat corruption and collusion and prevent these practices from plaguing and undermining public procurement processes. This matter is especially important to Brazil where Operation Car Wash (Operação Lava Jato) exposed widespread corruption...

Division in lots is one of the procurer's most crucial decisions. The number and the size of lots directly influences competition in the tendering process and thereby the procurer's budget and the quality of supply. This paper focuses on the effects the division of procurements into multiple...

In softening price competition at the tendering stage, a bidding ring may jeopardize the buyer's effort to award a procurement contract at her most advantageous economic conditions. By exploiting the similarities between oligopolistic and procurement markets, we discuss how structural conditions...

We study the relationship between collusion and corruption in a stylized model of repeated procurement where the cost of reporting corrupt bureaucrats gives rise to a free riding problem. As in Dixit (2015, 2016), cooperation among honest suppliers alleviates free-riding in reporting. However,...

Using a dataset of public procurement auctions and registered shareholders of all bidding firms in Singapore, we study the effects of ownership networks on prices and efficiency in product markets. We document prevalent identical bidding that is positively correlated with ownership networks...

We study the relationship between collusion and corruption in a stylized model of repeated procurement where the cost of reporting corrupt bureaucrats gives rise to a free riding problem. As in Dixit (2015, 2016), cooperation among honest suppliers alleviates free-riding in reporting. However,...

This paper proposes a method of bid-rigging detection, which allows us to reveal cartels in procurement auctions without any prior knowledge of the market structure. We apply it to data on highway construction procurements in one of the Russian regions and show that five suppliers demonstrated...

A seminal result in the theory of competitive bidding holds that the buyer can lower the expected awarding price of a procurement contract by setting a reserve price below her opportunity cost for realizing the project. In this paper, we first provide a non-technical explanation for this result,...