Economics Webinar - A Field Experiment on Antitrust Compliance

We study the effectiveness of firms' compliance programs by conducting a field experiment in which we disclose to a random subset of Japanese firms evidence of illegal bid-rigging. We find that the information that we disclose affects the bidding behavior of the treated firms: our test of bid-rigging fails to reject the null of competition when applied to the bidding data of the treated firms after the intervention. We find evidence that these changes are not the result of firms ceasing to collude, however. Our findings instead suggest that firms continue to collude even after out information disclosure intervention and that the changes in the bidding behavior we document are the result of active concealment of evidence by cartelizing firms.