Bid Roundness Under Collusion in Japanese Procurement Auctions

We analyze the “roundness level” of bids—defined as the number of zeros at the end of the bid—in public procurement auctions for construction works in Okinawa Prefecture, Japan, where a bid-rigging case was filed. We hypothesize that bid rigging increases the roundness of bids through the bid coordination process. Specifically, winners choose round numbers to avoid any miscommunication when they announce their planned bids to other ring members, and losers prefer round numbers when they arbitrarily bid above the winning bid. We find that (1) there is a positive relationship between the roundness of a bid and its relative value as a fraction of the reserve price, (2) the roundness of bids is higher when collusion is active than when it is inactive, (3) among the ring bids, the roundness of the lowest bids is even higher than that of the other bids, and (4) bids by non-ring members are also round when collusion is active.     

Labor markets and cultural values: Evidence from Japanese and American views about caregiving immigrants

One overlooked reason for the persistence of distinct cultural values across rich democracies, we argue, is a country's labor market structure. Parents seeking to position their children for long‐term success would do well to instill values consistent with requirements of the labor market in the country where their children are likely to work. To the extent that labor markets are fluid, as in the United States, parents should teach their children to be resourceful and creative. In countries like Japan with relatively rigid labor markets, where workers have one chance to land a long‐term contract with a leading company, parents instead should instill the values of hard work and respect for authority. We find evidence consistent with this argument in survey experiments about attitudes in the United States and Japan about the desirability of employing immigrants for care work, and what values the immigrant care workers should hold. We also find evidence of indirect norm creation. American and Japanese respondents prefer immigrants—not just caregiving immigrants—whose values align with their country's type of valued human capital.     

Research and analysis on bid rigging mechanisms

This paper examines detected bid rigging mechanisms based on the decisions of the Japan Fair Trade Commission (JFTC) from April 1996 to December 2005. We first develop some indicators that represent important characteristics of the ring mechanism from a theoretical and empirical point of view. We then classify bid rigging cases filed by the JFTC based on these indicators. We also provide simple economic analysis using the JFTC database and find that (1) extremely simple mechanisms were adopted in many bid rigging cases detected in Japan during the period examined and (2) some ring mechanisms facilitate a reduction in information asymmetry among ring members, however such function plays a subordinate role.