Variation in Bid-Rigging Cartels’ Overcharges: An Exploratory Study

Abstract

Empirical examinations into the determinants of cartel overcharges are limited in the economic literature on collusion. We review the literature and perform a meta-analysis model of overcharges using data on 112 contemporary, penalized bid-rigging episodes over 27 years. We find that the price effects of bidding rings, controlling for industry fixed effects, are affected by buyer market concentration, seller industry concentration, and two temporal features (episodic duration and recessions during collusion).

Keywords: Bid Rigging, Cartel Overcharge, Meta-Analysis, Competition Law

JEL Classification: K21, K42, L1, L2, L4