A Social Network-Based Examination on Bid Riggers’ Relationships in the Construction Industry: A Case Study of China

Abstract

Collusive bidding has been an insidious issue in the construction industry. Bidders initiate collusive networks of various sizes to win market shares. The popularity of collusive bidding networks affects market fairness and erodes the interests of market players. Although considerable research efforts were made to diagnose collusive bidding networks, there remains a gap in knowledge regarding the relationships bid riggers use to engage in the networks. Therefore, this study used the social network method, where two hundred sixteen collusion cases were collected from China to test these relationships. The results show that collusive bidding networks were characterized by sparseness, a small scale, a high concentration, and strong randomness. Three types of collusive bidding networks were also detected: contractual, spontaneous, and shadow. Furthermore, these collusive bidding networks had discrepancies regarding participants’ identities, forms of collusive bids, and the determination of bid winners. It was found that the proposed social network model of deliberating bid riggers’ relationships lays a solid foundation for the detection of collusive bidding in the construction sector.