Transparency in Repeated Procurement: when Hiding is Better

B. Cesi, A. Di Natale, Economics Bulletin, Vol. 39, No. 1, 14-23. (2019)

Abstract: In this paper we study the effect of transparency on the willingness to collude in repeated procurement competitive tenderings. We allow the buyer to postpone the revelation of the winner's identity and show that such a policy may make collusive agreements less stable in both simultaneous and sequential competitive procedures. When the buyer postpones the revelation of the winner's identity in a scenario in which colluding and "honest" (never colluding) firms participate to the same tendering, the threat of a retaliation, by means of an aggressive bidding by the colluding firms, is weakened and collusion is less stable

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