Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/188913 
Year of Publication: 
2018
Series/Report no.: 
Queen's Economics Department Working Paper No. 1401
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
We study the impact of an investigation into collusion and corruption to learn about the organization of cartels in public procurement auctions. Our focus is on Montreal’s asphalt industry, where there have been allegations of bid rigging, market segmentation, complementary bidding and bribes to bureaucrats, and where, in 2009, a police investigation was launched. We collect procurement data and use a difference-in-difference approach to compare outcomes before and after the investigation in Montreal and in Quebec City, where there have been no allegations of collusion or corruption. We find that entry and participation increased, and that the price of procurement decreased. We then decompose the price decrease to quantify the importance of two aspects of cartel organization, coordination and entry deterrence, for collusive pricing. We find that the latter explains only a small part of the decrease.
Subjects: 
Collusion
Corruption
Bid rigging
Entry deterrence
JEL: 
L22
L74
D44
H57
Document Type: 
Working Paper

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