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Detecting bid-rigging coalitions in different countries and auction formats
- Publication Year :
- 2021
-
Abstract
- We propose an original application of screening methods using machine learning to detect collusive groups of firms in procurement auctions. As a methodical innovation, we calculate coalition-based screens by forming coalitions of bidders in tenders to flag bid-rigging cartels. Using Swiss, Japanese and Italian procurement data, we investigate the effectiveness of our method in different countries and auction settings, in our cases first-price sealed-bid and mean-price sealed-bid auctions. We correctly classify 90\% of the collusive and competitive coalitions when applying four machine learning algorithms: lasso, support vector machine, random forest, and super learner ensemble method. Finally, we find that coalition-based screens for the variance and the uniformity of bids are in all the cases the most important predictors according the random forest.
- Subjects :
- Economics - General Economics
Subjects
Details
- Database :
- arXiv
- Publication Type :
- Report
- Accession number :
- edsarx.2105.00337
- Document Type :
- Working Paper