Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making
Collusion is an all-pervading illegal market behavior that can undermine the sustainable development of the construction industry. It is acknowledged that collusive bidding decision making is influenced by conspirators’ cognitive bias. Nevertheless, the understanding of such an influence mechanism r...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-07-01
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| Series: | Buildings |
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| Online Access: | https://www.mdpi.com/2075-5309/12/7/997 |
| _version_ | 1827624410392035328 |
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| author | Zhengmin Peng Kunhui Ye Jiale Li |
| author_facet | Zhengmin Peng Kunhui Ye Jiale Li |
| author_sort | Zhengmin Peng |
| collection | DOAJ |
| description | Collusion is an all-pervading illegal market behavior that can undermine the sustainable development of the construction industry. It is acknowledged that collusive bidding decision making is influenced by conspirators’ cognitive bias. Nevertheless, the understanding of such an influence mechanism remains vague in the literature. This study aims to examine the mechanism of conspirators’ to-collude decision making by establishing a system dynamic model. The model development is based on the theories of cognitive biases, collusive bidding, and complex adaptive system. Multiple scenarios were simulated in the context of the Chinese construction industry. Three most influential cognitive bias are overconfidence, the illusion of control, and cognitive dissonance. The simulation results reveal conspirators’ intrinsic mechanisms to decide whether they deserve to participate in collusive bidding. The evolution of to-collude decision making is characterized by nonlinearity, multiplier, and stimulus enhancement effects. Collusion motivation and enterprise network relationships expand conspirators’ to-collude decision making. The increase of government regulation intensity and enterprise performance inhibit conspirators’ to-collude decision making. This study provides an insight into the cycle of collusion emergence from a complex system perspective and implies that antitrust authorities can launch carrot-and-stick measures for better regulation. |
| first_indexed | 2024-03-09T12:08:15Z |
| format | Article |
| id | doaj.art-01429128a78b4d98a1be563baa8d3a1c |
| institution | Directory Open Access Journal |
| issn | 2075-5309 |
| language | English |
| last_indexed | 2024-03-09T12:08:15Z |
| publishDate | 2022-07-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Buildings |
| spelling | doaj.art-01429128a78b4d98a1be563baa8d3a1c2023-11-30T22:55:10ZengMDPI AGBuildings2075-53092022-07-0112799710.3390/buildings12070997Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision MakingZhengmin Peng0Kunhui Ye1Jiale Li2School of Management Science and Real Estate, Chongqing University, 83# Shabei St., Shapingba District, Chongqing 400045, ChinaSchool of Management Science and Real Estate, Chongqing University, 83# Shabei St., Shapingba District, Chongqing 400045, ChinaSchool of Management Science and Real Estate, Chongqing University, 83# Shabei St., Shapingba District, Chongqing 400045, ChinaCollusion is an all-pervading illegal market behavior that can undermine the sustainable development of the construction industry. It is acknowledged that collusive bidding decision making is influenced by conspirators’ cognitive bias. Nevertheless, the understanding of such an influence mechanism remains vague in the literature. This study aims to examine the mechanism of conspirators’ to-collude decision making by establishing a system dynamic model. The model development is based on the theories of cognitive biases, collusive bidding, and complex adaptive system. Multiple scenarios were simulated in the context of the Chinese construction industry. Three most influential cognitive bias are overconfidence, the illusion of control, and cognitive dissonance. The simulation results reveal conspirators’ intrinsic mechanisms to decide whether they deserve to participate in collusive bidding. The evolution of to-collude decision making is characterized by nonlinearity, multiplier, and stimulus enhancement effects. Collusion motivation and enterprise network relationships expand conspirators’ to-collude decision making. The increase of government regulation intensity and enterprise performance inhibit conspirators’ to-collude decision making. This study provides an insight into the cycle of collusion emergence from a complex system perspective and implies that antitrust authorities can launch carrot-and-stick measures for better regulation.https://www.mdpi.com/2075-5309/12/7/997collusive biddingcognitive biascomplex adaptive systemcollusion motivationgovernment regulation intensity |
| spellingShingle | Zhengmin Peng Kunhui Ye Jiale Li Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making Buildings collusive bidding cognitive bias complex adaptive system collusion motivation government regulation intensity |
| title | Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making |
| title_full | Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making |
| title_fullStr | Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making |
| title_full_unstemmed | Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making |
| title_short | Break the Cycle of Collusion: Simulation to Influence Mechanism of Cognitive Bias on To-Collude Decision Making |
| title_sort | break the cycle of collusion simulation to influence mechanism of cognitive bias on to collude decision making |
| topic | collusive bidding cognitive bias complex adaptive system collusion motivation government regulation intensity |
| url | https://www.mdpi.com/2075-5309/12/7/997 |
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