Dr. Robert C. Marshall of Bates White, LLC
Bidding Rings and the Design of Anti-Collusion Measures for
Auctions and Procurements
Authors: William E. Kovacic,1 Robert C. Marshall,2 Leslie M. Marx,3 and Matthew E. Raiff4
Forthcoming as Chapter 15 in Handbook of Procurement, edited by N. Dimitri, G. Piga and G.
Spagnolo., Cambridge University Press.
Abstract
If collusion is a major concern for the designers of an auction or procurement then firstprice sealed bidding should be considered rather than open-outcry procedures. Auctioneers
and procurement agents should limit the amount of information provided to bidders
regarding both the auction outcomes and the bids of their competitors. In addition, in the
absence of a compelling reason, the right of last refusal should not be granted to an
incumbent supplier. However, auctioneers and procurement agents should provide detailed
information to the entire bidding public prior to the auction about the item being
sold/procured. Auctioneers and procurement agents should maintain a record of all bids,
not just those of winners, as well as all other aspects of the auction/procurement. It should
be made known ex ante that these record will be made available to public enforcement
authorities and/or private litigants should an antitrust investigation occur. To the extent
possible, auctioneers should allow bidders to submit multiple bids, with some under
disguised identities. Finally, auctioneers should hold auctions, and procurers should hold
sales, at long, irregular time intervals.
1
William E. Kovacic is a commissioner with the U.S. Federal Trade Commission. The views expressed here are his
alone and not necessarily those of the Federal Trade Commission or its individual members.
2
Penn State University and Bates White, LLC
3
Duke University. This chapter was completed while Marx was visiting the US Federal Communications Commission,
but the views expressed do not necessarily reflect those of the FCC, its staff, or Commissioners.
4
Bates White, LLC
Law Seminars International | International Cartels | Sept 7 & 8, 2006 | Washington DC
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