Game Analysis of Harnessing Collusion in the Government Procurement Field

Abstract

The supervision of collusion behavior in the government procurement is discussed in this paper. The parallel collusion game model between suppliers and the vertical collusion game model between suppliers and procurement departments are respectively constructed. The Nash equilibrium solution of the parallel collusion model is analyzed. For no Nash equilibrium in the vertical collusion game model, then the mixed strategy equilibrium is analyzed. The relations between the monitoring and inspecting probability, punishment (fines and long-term loss) and collusion strategy are explained. The exchangeability between monitoring strategy and punishment is verified. Summarize models' optimal strategy solution, and on this basis, point out relevant policy suggestions.