Detecting Collusion in Timber Auctions : An Application to Romania
Romania was one of the first transition countries in Europe to introduce auctions for allocating standing timber (stumpage) in public forests. In comparison with the former system in the country-administrative allocation at set prices-timber auctions offer several potential advantages: greater reven...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/12/7293538/detecting-collusion-timber-auctions-application-romania http://hdl.handle.net/10986/9263 |
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okr-10986-9263 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADMINISTERED PRICES ADVERTISING AGRICULTURE ANNUAL HARVEST ANNUAL QUOTA AREAS OF FOREST AUCTION BASIC BIDDING COMMERCIAL ENTERPRISES COMMUNITIES COUNTRY'S FOREST AREA DEMAND FOR TIMBER DIRECT MARKETING DOMESTIC WOOD FAIR FOREST FOREST ACCESS FOREST ADMINISTRATION FOREST ASSOCIATIONS FOREST CODE FOREST COMPOSITION FOREST DEVELOPMENT FOREST DIRECTORATES FOREST DISEASES FOREST HEALTH FOREST INVENTORY FOREST MANAGEMENT FOREST MANAGEMENT PLANS FOREST OFFICERS FOREST OWNERS FOREST OWNERSHIP FOREST PRODUCTION FOREST PRODUCTS FOREST PROTECTION FOREST REGENERATION FOREST ROADS FOREST SECTOR FOREST USERS FORESTRY ENTERPRISE FORESTRY RESEARCH FORESTS ISSUES LABOR MARKET LOGGING LOGGING COMPANIES LOGGING COMPANY LOGGING EQUIPMENT LOGGING OPERATIONS LOGS MARKET CONDITIONS MARKET ECONOMIES MARKET ECONOMY MARKET PRICE MARKET VALUE MARKETING MIDDLE EAST MIDDLE EASTERN MOUNTAINS NATIONAL FORESTRY NATIONAL FORESTS PRICE VOLATILITY PRIMARY FOREST PRIVATE FORESTS PROCESSORS PURCHASING REFUSE REGIONAL FOREST ROAD NETWORK SALE SALVAGE LOGGING SAN SPECIES SPREAD STATE FORESTS SUPPLIERS SURPLUS TECHNOLOGICAL CHANGE TIMBER TIMBER AUCTIONS TIMBER BUYERS TIMBER HARVEST TIMBER HARVESTING TIMBER HARVESTS TIMBER MARKET TIMBER MARKETS TIMBER PRICES TIMBER SALES TIMBER SUPPLY TOTAL SALES TREE TREES VOLATILITY WEBSITE WESTERN EUROPE WILDLIFE WOOD WOOD MARKET WOOD PROCESSING WOOD PROCESSING INDUSTRY WOOD-BASED INDUSTRIES |
| spellingShingle |
ADMINISTERED PRICES ADVERTISING AGRICULTURE ANNUAL HARVEST ANNUAL QUOTA AREAS OF FOREST AUCTION BASIC BIDDING COMMERCIAL ENTERPRISES COMMUNITIES COUNTRY'S FOREST AREA DEMAND FOR TIMBER DIRECT MARKETING DOMESTIC WOOD FAIR FOREST FOREST ACCESS FOREST ADMINISTRATION FOREST ASSOCIATIONS FOREST CODE FOREST COMPOSITION FOREST DEVELOPMENT FOREST DIRECTORATES FOREST DISEASES FOREST HEALTH FOREST INVENTORY FOREST MANAGEMENT FOREST MANAGEMENT PLANS FOREST OFFICERS FOREST OWNERS FOREST OWNERSHIP FOREST PRODUCTION FOREST PRODUCTS FOREST PROTECTION FOREST REGENERATION FOREST ROADS FOREST SECTOR FOREST USERS FORESTRY ENTERPRISE FORESTRY RESEARCH FORESTS ISSUES LABOR MARKET LOGGING LOGGING COMPANIES LOGGING COMPANY LOGGING EQUIPMENT LOGGING OPERATIONS LOGS MARKET CONDITIONS MARKET ECONOMIES MARKET ECONOMY MARKET PRICE MARKET VALUE MARKETING MIDDLE EAST MIDDLE EASTERN MOUNTAINS NATIONAL FORESTRY NATIONAL FORESTS PRICE VOLATILITY PRIMARY FOREST PRIVATE FORESTS PROCESSORS PURCHASING REFUSE REGIONAL FOREST ROAD NETWORK SALE SALVAGE LOGGING SAN SPECIES SPREAD STATE FORESTS SUPPLIERS SURPLUS TECHNOLOGICAL CHANGE TIMBER TIMBER AUCTIONS TIMBER BUYERS TIMBER HARVEST TIMBER HARVESTING TIMBER HARVESTS TIMBER MARKET TIMBER MARKETS TIMBER PRICES TIMBER SALES TIMBER SUPPLY TOTAL SALES TREE TREES VOLATILITY WEBSITE WESTERN EUROPE WILDLIFE WOOD WOOD MARKET WOOD PROCESSING WOOD PROCESSING INDUSTRY WOOD-BASED INDUSTRIES Saphores, Jean-Daniel Vincent, Jeffrey R. Marochko, Valy Detecting Collusion in Timber Auctions : An Application to Romania |
| geographic_facet |
Europe and Central Asia Eastern Europe Romania |
| relation |
Policy Research Working Paper; No. 4105 |
| description |
Romania was one of the first transition countries in Europe to introduce auctions for allocating standing timber (stumpage) in public forests. In comparison with the former system in the country-administrative allocation at set prices-timber auctions offer several potential advantages: greater revenue generation for the government, a higher probability that tracts will be allocated to the firms that value them most highly, and stronger incentives for technological change within industry and efficiency gains in the public sector. Competition is the key to realizing these advantages. Unfortunately, collusion among bidders often limits competition in timber auctions, including in well-established market economies such as the United States. The result is that tracts sell below their fair market value, which undermines the advantages of auctions. This paper examines the Romanian auction system, with a focus on the use of econometric methods to detect collusion. It begins by describing the historical development of the system and the principal steps in the auction process. It then discusses the qualitative impacts of various economic and institutional factors, including collusion, on winning bids in different regions of the country. This discussion draws on information from a combination of sources, including unstructured interviews conducted with government officials and company representatives during 2003. Next, the paper summarizes key findings from the broader research literature on auctions, with an emphasis on empirical studies that have developed econometric methods for detecting collusion. It then presents an application of such methods to timber auction data from two forest directorates in Romania, Neamt and Suceava. This application confirms that data from Romanian timber auctions can be used to determine the likelihood of collusion, and it suggests that collusion reduced winning bids in Suceava in 2002 and perhaps also in Neamt. The paper concludes with a discussion of actions that the government can take to reduce the incidence of collusion and minimize its impact on auction outcomes. |
| author2 |
Abrudan, Ioan |
| author_facet |
Abrudan, Ioan Saphores, Jean-Daniel Vincent, Jeffrey R. Marochko, Valy |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Saphores, Jean-Daniel Vincent, Jeffrey R. Marochko, Valy |
| author_sort |
Saphores, Jean-Daniel |
| title |
Detecting Collusion in Timber Auctions : An Application to Romania |
| title_short |
Detecting Collusion in Timber Auctions : An Application to Romania |
| title_full |
Detecting Collusion in Timber Auctions : An Application to Romania |
| title_fullStr |
Detecting Collusion in Timber Auctions : An Application to Romania |
| title_full_unstemmed |
Detecting Collusion in Timber Auctions : An Application to Romania |
| title_sort |
detecting collusion in timber auctions : an application to romania |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/12/7293538/detecting-collusion-timber-auctions-application-romania http://hdl.handle.net/10986/9263 |
| _version_ |
1764406908796534784 |
| spelling |
okr-10986-92632021-04-23T14:02:42Z Detecting Collusion in Timber Auctions : An Application to Romania Saphores, Jean-Daniel Vincent, Jeffrey R. Marochko, Valy Abrudan, Ioan Bouriaud, Laura Zinnes, Clifford ADMINISTERED PRICES ADVERTISING AGRICULTURE ANNUAL HARVEST ANNUAL QUOTA AREAS OF FOREST AUCTION BASIC BIDDING COMMERCIAL ENTERPRISES COMMUNITIES COUNTRY'S FOREST AREA DEMAND FOR TIMBER DIRECT MARKETING DOMESTIC WOOD FAIR FOREST FOREST ACCESS FOREST ADMINISTRATION FOREST ASSOCIATIONS FOREST CODE FOREST COMPOSITION FOREST DEVELOPMENT FOREST DIRECTORATES FOREST DISEASES FOREST HEALTH FOREST INVENTORY FOREST MANAGEMENT FOREST MANAGEMENT PLANS FOREST OFFICERS FOREST OWNERS FOREST OWNERSHIP FOREST PRODUCTION FOREST PRODUCTS FOREST PROTECTION FOREST REGENERATION FOREST ROADS FOREST SECTOR FOREST USERS FORESTRY ENTERPRISE FORESTRY RESEARCH FORESTS ISSUES LABOR MARKET LOGGING LOGGING COMPANIES LOGGING COMPANY LOGGING EQUIPMENT LOGGING OPERATIONS LOGS MARKET CONDITIONS MARKET ECONOMIES MARKET ECONOMY MARKET PRICE MARKET VALUE MARKETING MIDDLE EAST MIDDLE EASTERN MOUNTAINS NATIONAL FORESTRY NATIONAL FORESTS PRICE VOLATILITY PRIMARY FOREST PRIVATE FORESTS PROCESSORS PURCHASING REFUSE REGIONAL FOREST ROAD NETWORK SALE SALVAGE LOGGING SAN SPECIES SPREAD STATE FORESTS SUPPLIERS SURPLUS TECHNOLOGICAL CHANGE TIMBER TIMBER AUCTIONS TIMBER BUYERS TIMBER HARVEST TIMBER HARVESTING TIMBER HARVESTS TIMBER MARKET TIMBER MARKETS TIMBER PRICES TIMBER SALES TIMBER SUPPLY TOTAL SALES TREE TREES VOLATILITY WEBSITE WESTERN EUROPE WILDLIFE WOOD WOOD MARKET WOOD PROCESSING WOOD PROCESSING INDUSTRY WOOD-BASED INDUSTRIES Romania was one of the first transition countries in Europe to introduce auctions for allocating standing timber (stumpage) in public forests. In comparison with the former system in the country-administrative allocation at set prices-timber auctions offer several potential advantages: greater revenue generation for the government, a higher probability that tracts will be allocated to the firms that value them most highly, and stronger incentives for technological change within industry and efficiency gains in the public sector. Competition is the key to realizing these advantages. Unfortunately, collusion among bidders often limits competition in timber auctions, including in well-established market economies such as the United States. The result is that tracts sell below their fair market value, which undermines the advantages of auctions. This paper examines the Romanian auction system, with a focus on the use of econometric methods to detect collusion. It begins by describing the historical development of the system and the principal steps in the auction process. It then discusses the qualitative impacts of various economic and institutional factors, including collusion, on winning bids in different regions of the country. This discussion draws on information from a combination of sources, including unstructured interviews conducted with government officials and company representatives during 2003. Next, the paper summarizes key findings from the broader research literature on auctions, with an emphasis on empirical studies that have developed econometric methods for detecting collusion. It then presents an application of such methods to timber auction data from two forest directorates in Romania, Neamt and Suceava. This application confirms that data from Romanian timber auctions can be used to determine the likelihood of collusion, and it suggests that collusion reduced winning bids in Suceava in 2002 and perhaps also in Neamt. The paper concludes with a discussion of actions that the government can take to reduce the incidence of collusion and minimize its impact on auction outcomes. 2012-06-26T17:44:37Z 2012-06-26T17:44:37Z 2006-12 http://documents.worldbank.org/curated/en/2006/12/7293538/detecting-collusion-timber-auctions-application-romania http://hdl.handle.net/10986/9263 English en_US Policy Research Working Paper; No. 4105 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Eastern Europe Romania |