Kei Kawai

Department of Economics
University of California, Berkeley
530 Evans Hall #3880
Berkeley, CA 94720

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
NBER Program Affiliations: IO
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: University of California at Berkeley

NBER Working Papers and Publications

March 2019Data Driven Regulation: Theory and Application to Missing Bids
with Sylvain Chassang, Jun Nakabayashi, Juan M. Ortner: w25654
We document a novel bidding pattern observed in procurement auctions from Japan: winning bids tend to be isolated. There is a missing mass of close losing bids. This pattern is suspicious in the following sense: it is inconsistent with competitive behavior under arbitrary information structures. Building on this observation, we develop a theory of data-driven regulation based on “safe tests,” i.e. tests that are passed with probability one by competitive bidders, but need not be passed by non-competitive ones. We provide a general class of safe tests exploiting weak equilibrium conditions, and show that such tests reduce the set of equilibrium strategies that cartels can use to sustain collusion. We provide an empirical exploration of various safe tests in our data, as well as discuss coll...

National Bureau of Economic Research
1050 Massachusetts Ave.
Cambridge, MA 02138

Twitter RSS

View Full Site: One timeAlways