Article: Suppliers' collusion in public procurement: ex-ante determinants in zero initial contract price decrease auctions (the case of Russian healthcare) Journal: International Journal of Procurement Management (IJPM) 2023 Vol.17 No.2 pp.180 - 203 Abstract: In public procurement, awareness of the public buyer of the potential collusive behaviour of suppliers at auctions may help mitigate the risks of only a slight decrease of the initial contract price (ICP). In this research, we focus on a special case of zero ICP decrease auctions (due to suppliers' collusion) to identify the factors that significantly increase the probability of occurrence of such cases. A unique cross-sectional dataset on more than 42,000 electronic reverse (price) auctions conducted over 2014-2020 by public hospitals of St. Petersburg (Russia) was collected; of these auctions, only 0.4% constituted the class of auctions with zero ICP decrease. Even in the presence of such huge sample imbalance, our analysis allowed to identify a number of factors that statistically significantly influenced the probability of zero ICP decrease at auctions in the Russian healthcare. Appropriate policy recommendations are provided in the paper. Inderscience Publishers - linking academia, business and industry through research

Title: Suppliers' collusion in public procurement: ex-ante determinants in zero initial contract price decrease auctions (the case of Russian healthcare)

Authors: Evgenii V. Gilenko; Andrei E. Ivanov; Anastasia A. Golubeva; Olga N. Bezhenar

Addresses: Graduate School of Management, St. Petersburg University, 3 Volkhovskiy Per., St. Petersburg, Russia, 199004, Russia ' Graduate School of Management, St. Petersburg University, 3 Volkhovskiy Per., St. Petersburg, Russia, 199004, Russia ' Graduate School of Management, St. Petersburg University, 3 Volkhovskiy Per., St. Petersburg, Russia, 199004, Russia ' Graduate School of Management, St. Petersburg University, 3 Volkhovskiy Per., St. Petersburg, Russia, 199004, Russia

Abstract: In public procurement, awareness of the public buyer of the potential collusive behaviour of suppliers at auctions may help mitigate the risks of only a slight decrease of the initial contract price (ICP). In this research, we focus on a special case of zero ICP decrease auctions (due to suppliers' collusion) to identify the factors that significantly increase the probability of occurrence of such cases. A unique cross-sectional dataset on more than 42,000 electronic reverse (price) auctions conducted over 2014-2020 by public hospitals of St. Petersburg (Russia) was collected; of these auctions, only 0.4% constituted the class of auctions with zero ICP decrease. Even in the presence of such huge sample imbalance, our analysis allowed to identify a number of factors that statistically significantly influenced the probability of zero ICP decrease at auctions in the Russian healthcare. Appropriate policy recommendations are provided in the paper.

Keywords: suppliers' collusion; second-price auctions; public procurement; healthcare; rare event binary logistic regressions.

DOI: 10.1504/IJPM.2023.130737

International Journal of Procurement Management, 2023 Vol.17 No.2, pp.180 - 203

Received: 30 Jul 2021
Accepted: 06 Nov 2021
Published online: 04 May 2023 *

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Title: Suppliers' collusion in public procurement: ex-ante determinants in zero initial contract price decrease auctions (the case of Russian healthcare)

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