Complementary bidding and the collusive arrangement: Evidence from an antitrust investigation

Clustered bids and a missing mass of nearly tied bids have both been proposed as markers of collusion. We present causal empirical evidence from an actual pro- curement cartel that bidding involves both clustering and a gap around the winning bid. We support these results with information from testimony of cartel participants that explain how both patterns arise naturally as part of an arrangement featuring complementary bidding. Based on these findings, we develop an easy-to-implement screen for collusive arrangements featuring complementary bidding.

Clark, Robert, Decio Coviello and Adriano De Leverano (forthcoming), Complementary bidding and the collusive arrangement: Evidence from an antitrust investigation, American Economic Journal: Microeconomics