Robust Screens for Noncompetitive Bidding in Procurement Auctions

Sylvain Chassang, Kei Kawai, Jun Nakabayashi, Juan Ortner

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

We document a novel bidding pattern observed in procurement auctions from Japan: winning bids tend to be isolated, and there is a missing mass of close losing bids. This pattern is suspicious in the following sense: its extreme forms are inconsistent with competitive behavior under arbitrary information structures. Building on this observation, we develop systematic tests of competitive behavior in procurement auctions that allow for general information structures as well as nonstationary unobserved heterogeneity. We provide an empirical exploration of our tests, and show they can help identify other suspicious patterns in the data.

Original languageEnglish (US)
Pages (from-to)315-346
Number of pages32
JournalEconometrica
Volume90
Issue number1
DOIs
StatePublished - Jan 2022

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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