Kawai, Kei; Nakabayashi, Jun; Ortner, Juan M. - National Bureau of Economic Research - 2021
We study the inner workings of a bidding cartel focusing on the way in which bidders communicate with one another … regarding how each bidder should bid. We show that the designated winner of the cartel can attain higher payoffs by randomizing … theoretical predictions are borne out in practice by studying a bidding cartel that operated in the town of Kumatori, Japan …