Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority

Roldán, Flavia

doi:10.1111/j.1530-9134.2012.00352.x

Cited by 5 publications

(2 citation statements)

References 26 publications

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“…In collusive bidding, social networks have the main interaction features between nodes in the network [50]. The interaction specifies active or passive contacts for the operation of collusive bidding.…”

Section: Social Network In Collusive Biddingmentioning

confidence: 99%

A Social Network-Based Examination on Bid Riggers’ Relationships in the Construction Industry: A Case Study of China

Xiao

Zhou

et al. 2021

Buildings

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Collusive bidding has been an insidious issue in the construction industry. Bidders initiate collusive networks of various sizes to win market shares. The popularity of collusive bidding networks affects market fairness and erodes the interests of market players. Although considerable research efforts were made to diagnose collusive bidding networks, there remains a gap in knowledge regarding the relationships bid riggers use to engage in the networks. Therefore, this study used the social network method, where two hundred sixteen collusion cases were collected from China to test these relationships. The results show that collusive bidding networks were characterized by sparseness, a small scale, a high concentration, and strong randomness. Three types of collusive bidding networks were also detected: contractual, spontaneous, and shadow. Furthermore, these collusive bidding networks had discrepancies regarding participants’ identities, forms of collusive bids, and the determination of bid winners. It was found that the proposed social network model of deliberating bid riggers’ relationships lays a solid foundation for the detection of collusive bidding in the construction sector.

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Section: Social Network In Collusive Biddingmentioning

confidence: 99%

A Social Network-Based Examination on Bid Riggers’ Relationships in the Construction Industry: A Case Study of China

Xiao

Zhou

et al. 2021

Buildings

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show abstract

“…We follow Jackson and Wolinsky (1996) and Jackson and van den Nouweland (2004) to characterize the stable and the strongly stable networks.Asides from these theoretical articles, there is also more and more literature that applies the theory of economic networks to models of oligopoly. In particular, the present article is closely related to Belle ‡amme and Bloch (2004) and Roldán (2010). Belle ‡amme and Bloch (2004) have analyzed the collusive network of market-sharing agreements among …rms, but they do not consider the existence of antitrust authorities.…”

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confidence: 99%

Covert Networks and Antitrust Policy

Roldán

2011

SSRN Journal

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The Public-Private Sector Research Center is a Research Center based at IESE Business School. Its mission is to develop research that analyses the relationships between the private and public sectors primarily in the following areas: regulation and competition, innovation, regional economy and industrial politics and health economics.Research results are disseminated through publications, conferences and colloquia. These activities are aimed to foster cooperation between the private sector and public administrations, as well as the exchange of ideas and initiatives.The sponsors of the SP-SP Center are the following: AbstractThis article studies the e¤ectiveness of two di¤erent antitrust policies by characterizing the network structure of market-sharing agreements that arises under those settings. Market-sharing agreements prevent …rms from entering each other's market. The set of these agreements de…nes a collusive network, which is pursued by antitrust authorities. This article shows that under a constant probability of inspection and a penalty equal to …rm's limited liability, …rms form collusive alliances where all of them are interconnected. In contrast, when the antitrust policy reacts to prices in both, probability of inspection and penalty, …rms form collusive cartels where they are not necessarily fully interconnected. This implies that more competitive structures can be sustained in the second case than in the …rst case. Notwithstanding, antitrust laws may have a pro-competitive effect in both scenarios, as they give …rms in large alliances more incentives to cut their agreements at once. JEL Classi…cation Numbers: D43, K21, L411 Cartels exists and they are present among us even if we are not able to see them. Collusive practices create concern to antitrust authorities, which devote considerable time and e¤orts in order to discover and prosecute them.Among di¤erent collusive practices, we …nd market-sharing agreements. These agreements are agreements by which …rms divide up a market and agree not to enter each other's territory. In the present article, market-sharing agreement are modeled as bilateral agreements and the set of these reciprocal agreements gives rise to a collusive network among …rms.One goal of antitrust authorities is to weaken …rms'incentive to form and to maintain collusive agreements over time in order to increase market e¢ ciency. This article addresses this point by studying the e¤ectiveness of antitrust policy to deter the formation of collusive agreements in a social network context.Toward that ends, this article examines the collusive network structure that arises under the presence of two di¤erent antitrust policies. One of these policies is de…ned by a …xed probability of inspection, and a penalty equal to the …rm's limited liability. The other policy is characterized by a probability of inspection that depends on prices, and by a …ne related to damage that collusive agreements have caused to consumers.In the present network framework, the probability of being detected depends ...

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The Welfare Implications of the Meeting Design of a Cartel

Avramovich

2019

Rev Ind Organ

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Collusive Networks in Market‐Sharing Agreements in the Presence of an Antitrust Authority

Cited by 5 publications

References 26 publications

A Social Network-Based Examination on Bid Riggers’ Relationships in the Construction Industry: A Case Study of China

A Social Network-Based Examination on Bid Riggers’ Relationships in the Construction Industry: A Case Study of China

Covert Networks and Antitrust Policy

The Welfare Implications of the Meeting Design of a Cartel

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