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Organization, technology & management in construction : an international journal, Vol. 1 No. 2, 2009.

Original scientific paper

The Mechanics of Collusion

Christian Brockmann ; University of Applied Sciences Bremen, Germany

Full text: english pdf 326 Kb

page 51-58

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Abstract

the construction industry is according to the bribe Payers index from transParency international the most corruPt industry, well ahead of the defense sector.
Corruption and collusion are closely interrelated in the public sector,
they nurture each other. However, collusion does not depend on cor-
ruption, it can thrive by itself. A basic question is whether collusion
is mostly a moral or an institutional issue. Using the title “mechan-
ics of collusion” and proving the implied automatic reactions clearly strengthens the argument for an institutional view. There is no free-
dom of choice in mechanics and accordingly there are no moral issues.
The predominant antecedents of the construction industry (sealed-bid
auctions, competitive environment, large contract volumes) are setting incentives for collusive cooperation. Such a behavior can even be morally defended. Since it is illegal (while extant) in most countries, it can not be encouraged. However, it is worthwhile to discuss changes to the procurement process that will set incentives to discourage collusion.

Keywords

collusion; game theory; institutions; monopsony

Hrčak ID:

65013

URI

https://hrcak.srce.hr/65013

Publication date:

1.12.2009.

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