NCJ Number
89236
Date Published
1983
Length
32 pages
Annotation
This research suggests that increasing antitrust enforcement, especially penalties, is associated with lower levels of collusion among highway construction contractors.
Abstract
This assessment of the deterrent effect of antitrust enforcement in highway construction involved three steps: (1) the calculation of contractors' profits as a measure of the prevalence of collusive bidding, (2) the construction of series measuring contractors' perceptions of Department of Justice enforcement efforts; and (3) statistical analysis of the apparent effect of the series on the measure of prevalence. Variables measuring Federal antitrust enforcement efforts were the probability that a colluder might be indicted, the probability that a colluder will be convicted, the probability that a colluder will be fined if convicted, the probability that a colluder convicted will be sentenced to jail, and the average fines and jail sentences levied for those fined or jailed. Collinearity among the six enforcement series hampered the analysis of how the different aspects of antitrust enforcement measured by the six series interact with one another to affect the level of collusion. Condensing the six to the expected monetary loss facing colluders produced a single measure of enforcement which consistently indicated a deterrent effect for any change or combination of changes in the enforcement series which increased expected loss. Tabular and graphic data are appended.