The Social Structure of Anticompetitive Behavior

• In Event: Tracking Bid-Rigging and Corruption Schemes Across Space and Time

Abstract

This study tracks the bidding structure of asphalt and sewer construction markets in 33 of the largest cities in the Canadian province of Quebec between 2002 and 2013. Using bidding data (n = 6,669 contracts), the research couples economic and social network competition indicators to capture two sets of anticompetitive behavior: rotational bid-rigging and cartel formation. On the one hand, results show a negative correlation between the core-periphery positioning (network heterogeneity coefficient) and the performance features of dominant bidding firms (economic indicator). On the other hand, the study links distinct social structures within construction markets to the presence of corruption and collusion. These results suggest a path to detecting irregular procurement bidding patterns across space and time, in the process providing a tracking system for practical research applications.

Authors

• Maxime Reeves-Latour, University of Montreal

• Carlo Morselli, University of Montreal