Cartels, Competition and Public Procurement
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Cartels, Competition and Public Procurement

Law and Economics Approaches to Bid Rigging

  • New Horizons in Competition Law and Economics series

Stefan E. Weishaar

Stefan Weishaar explores the ways in which economic theory can be used to mitigate the adverse effects of bid rigging cartels. The study sheds light on one of the vital issues for achieving cost-effective public procurement – which is itself a critical question in the context of the global financial crisis. The book comprehensively examines whether different laws deal effectively with bid rigging and the ways in which economic theory can be used to mitigate the adverse effects of such cartels. The employed industrial economics and auction theory highlights shortcomings of the law in all three jurisdictions – the European Union, China and Japan – and seeks to raise the awareness of policymakers as to when extra precautionary measures against bid rigging conspiracies should be taken.
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Chapter 9: The effectiveness of the legal regime applicable to bid rigging in Japan

Stefan E. Weishaar


This chapter analyses whether the legal framework governing bid rigging conspiracies in Japan deals effectively with them so as to allow government entities to procure at competitive prices. It thereby draws upon the law and economics insights presented earlier in this book regarding optimal deterrence. It measures the current legal framework against the law and economics findings and examines whether the incentives created are sufficient to induce bidders to comply with the law. This approach is necessary since there is no hard empirical evidence available that confirms that bid rigging conspiracies in Japan are widespread and inflict considerable damage upon society. Anecdotal evidence reported earlier, which suggests a general dissatisfaction with the price level and the quality procured, is therefore complemented by this theoretic treatment.

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