Characteristics of Collusive Practices in Bidding: Mixed Methods Study in China

Abstract

Over the past decade, collusive bidding has become more complicated with the development of economies and computer technologies. Understanding the emerging characteristics of collusive bidding helps antitrust authorities advance countermeasures to mitigate such illegal business competition. This study extracted data from 2,007 court judgment documents in China through text mining techniques. Using two-dimensional factors (i.e., project- and colluder-related factors), we performed an effect size-based significance test to demonstrate the new features of collusive practices. The study found that the larger the project size, the more complex the collusive bidding process. In addition, frequent communication between those collusive bidders stemming from adjacent provinces boosts the similarity of collusive biddings between regions. Furthermore, the study disclosed that senior colluders are more intended for those challenging collusive practices. The findings shed some light on feature determination when developing intelligent collusion detectors and offer implications for preventing collusive bidding.