Carrot or stick? A study on “bid-rigging norms” by simulation: inducing factors and deterring measures

[摘要] This study aims to analyze the structure of the emergence and maintenance of the cartel mechanism as an informal organization and the measures to deter bid-rigging. We propose an agent-based bid-rigging norms model and validate it with a mathematical model. We clarify that the auction system primarily used in public procurements has a structure inducing bid-rigging in which meta-norms are unnecessary. We also show that punishment for deviation from bid-rigging plays a critical role in establishing and maintaining it. In addition, we explore the authorities' actions to deter bid-rigging by examining three measures: the flexible setting of reserve prices, the administrative surcharge and leniency system under the Antimonopoly Law, and applying the bid-rigging offense under the Criminal Law. As a result, the study reveals that the administrative surcharge and the leniency system are insufficient to deter bid-rigging, and the adequate measures are the flexible setting of reserve prices and applying the bid-rigging offense. Furthermore, the simultaneous implementation of these three measures more effectively enables deterring bid-rigging.

[发布日期] 2023-08-24

[关键词] bid-rigging;collusion;auction;prisoners' dilemma;norms;agent-based simulation