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15 - Bidding rings and the design of anti-collusive measures for auctions and procurements

Published online by Cambridge University Press:  04 November 2009

William E. Kovacic
Commissioner of the Federal Trade Commission
Robert C. Marshall
Professor of Economics, Penn State University, USA
Leslie M. Marx
Associate Professor of Economics Duke University, USA
Matthew E. Raiff
Managing Partner, Bates White LLC, USA
Nicola Dimitri
Università degli Studi, Siena
Gustavo Piga
Università degli Studi di Roma 'Tor Vergata'
Giancarlo Spagnolo
Stockholm School of Economics
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Since the mid-1990s, the enforcement of competition laws against cartels has drawn considerable attention to the means by which buyers or sellers establish and manage collusive schemes. High-profile lawsuits against cartels in the food additives and vitamins sectors have made public an unprecedented wealth of information about how cartels operate. Complementing this stream of data is a modern body of scholarship that, working extensively with reported judicial decisions and other materials, has provided informative perspectives on the methods of cartel coordination.

For the most part, discussions inspired by modern enforcement developments and scholarly contributions have addressed the optimal design of public policies against cartels. Key focal points for debate have included the formulation of strategies for improving the detection of cartels (e.g., providing inducements for cartel members or employees of cartel members to inform public authorities about the existence of the cartel); the establishment or enhancement of private rights of action to supplement anti-cartel enforcement by public agencies; and the choice of remedies (e.g., civil damages and criminal punishment, including imprisonment for individuals).

In this chapter, we explore the implications of the modern data and literature on cartel coordination with a different orientation. Rather than assess refinements in public enforcement policy, we analyze possibilities for precautions that contracting parties can take independently, without necessarily invoking public laws that condemn cartels, to defeat or discourage collusion by bidders.

Handbook of Procurement , pp. 381 - 411
Publisher: Cambridge University Press
Print publication year: 2006

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