Application of Association Analysis to Detect Collusive Behaviour in Public Tenders

The purpose of this study is to examine the conditions required for the application of association analysis in the identification of the collusive behaviour of contractors in public tenders. It also focuses on determining the values of the confidence and lift measures that will describe the rules specific to a tender cartel. Worldwide research has aimed to develop effective and easy‑to‑use screening tests to identify cartel cases in public procurement. The recent research focuses on price (its distribution, variance, range) and classifiers allowing for detection of contractors whose mode of operation deviates from that commonly observed. This study follows the direction of current research. The main results of the study include the confirmation of the applicability of the method for the detection of colluding entities and the determination of the value of the confidence and lift measures specific to cartel cases. The policymakers, law enforcement agencies, contracting authorities and competitors of the cartels can use the proposed method to eliminate or at least to limit the scale of the problem. The main shortcoming of the application of the results is the inability to apply them to cartels pursuing an avoidance strategy. Further research will be conducted to develop a conceptual application of association analysis to all cartel strategies.

Investigating market power in the Belgian pork production chain

Belgian pork production has faced stagnating prices for decades. It remains unclear whether excessive market power from slaughterhouses or meat retailers has played a role in this trend. While market power studies can reveal some of the market dynamics in this setting, this type of research has not yet been applied to the Belgian pork market. The present paper investigates oligopolies and oligopsonies in the pork production sector. We build a new model that focuses on market power dynamics in the market for live pigs and distinguishes horizontal and vertical market power parameters, both for pig farmers and for slaughterhouses. The results follow from an empirical application using unique slaughterhouse data for 2001–2015. The results indicate that the farmers benefit from a significant power advantage in the live pig market, when very modest price demands are taken as a reference. The final market price of live pigs approaches the price requested by the farmers. On the other hand, the measured vertical market power also suggests that a pig farmer does not receive the (modest) full-wage-based salary. The market power of the slaughterhouses is also limited. Market power as a result of collusion—that is, horizontal market power—is present, but is not strong. However, there are significant differences between the slaughterhouses in terms of mark-up on the input prices. These differences reflect differences in company strategy, and this diversity further reduces the possibility to create sector-wide collusive behaviour.

A conjectural variation approach to vertical integration in agricultural cooperatives

Under the assumption that agricultural cooperative is a form of vertical integration, this paper, using conjectural variations, solves the profit-maximizing problem faced by the members in the multi-plant firm model in which they are vertically integrated with the agricultural cooperative. The average principle, the marginal principle, and the linear combination principle are derived for the competitive behaviour, collusive behaviour, and Cournot behaviour, respectively. The Nash equilibrium and economic efficiency in the cooperative system are then discussed. Finally, the model is numerically solved in an illustration. The marginal principle ensures the cooperative system to remain socially optimal in the competitive market.

Ranking of collusive behaviour in Indian agro-supply chain using interval 2-tuple linguistic TOPSIS method

Purpose The aim of this paper is to develop a model for the prioritization of collusive behaviours within Indian food grain supply chain (FGSC) to enable government authorities, entrusted with the task of public distribution, to address those frauds based on their priority for making an existing supply chain more sustainable. Design/methodology/approach An interval 2-tuple linguistic Technique for Order Preference by Similarity to Ideal Solution (ITL-TOPSIS) method has been used to deal with the problem of prioritization of frauds under incomplete and uncertain information. Unlike traditional methods, this methodology offers an ability to make informed decisions, without loss of information, while factoring in various ambiguities. Findings The outcome indicates that the most severe fraud is adulteration, which adversely impacts the health of a person. Bogus Ration Card comes next, as it results into the distribution of grains to non-poor, ineligible population rather than the deserving beneficiaries. Next is diversion, where diverted food grains end up being sold at much higher rates than specified subsidized rates. Theft is least severe, as this would not affect FGSC much until done on large scale. Research limitations/implications More decision-makers can be consulted to entertain more uncertainty and ambiguity. Also, a comparative study can be performed using different methodologies. Practical Implications The proposed modelling could empower various governmental and non-governmental regulatory bodies in formulation of food policies to effectively tackle the problem of inappropriate delivery of food to the unintended population and to take necessary informed decisions for ensuring food security and safety to the society at large. Originality/value There is a dearth of studies related to the prioritization of frauds within FGSC. This research bridges the gap in literature by providing a decision-making framework for prioritizing collusive behaviour under ambiguous and uncertain information.

The evolution of party funding in Italy: a case of inclusive cartelisation?

The aim of this paper is to analyse the evolution of the Italian public funding regime, in the light of the assumptions of the cartel party thesis. In the mid-1990s, the debate on party and party system change was revitalised by R. Katz and P. Mair (1995), who introduced the concept of the ‘cartel party’ as a means to study the increasing influence of the state on party politics. Among the main analytical dimensions of the cartel party argument, the system-level variables have received little attention with respect to the Italian case. In what follows I try to find out empirical evidence for the hypothesised changes in the relationship between parties and the state and in the patterns of inter-party competition. I will analyse the trends of the law-making process in the domain of party funding (1948–2014), by combining these observations with data on parties’ reliance on state funds and party collusive behaviour.