Cheap Signals, Costly Proof¶
Award-Layer Evidence Triage in Cartel Enforcement
Insper Institute of Education and Research, Sao Paulo, Brazil
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JLEO submission-clean version — May 2026.
83% Reduction in the bid-microdata pool the forensic stage must work on, while still recovering 131 of 193 adjudicated cobidders
Abstract¶
Cartel enforcement begins before legal proof exists. Agencies often observe contract-award records long before they recover the bid-level evidence needed to prove coordination. This paper asks whether that cheap award layer can allocate costly forensic attention. Using São Paulo's BEC procurement platform (2009--2019) and CADE adjudications, we construct a frequent-loser screen from award records alone: among zero-win firms, persistent participation ranks loser-side cartel-adjacency risk. The screen targets forensic priority, not cartel membership. We validate the ranking against adjudication-anchored cobidder labels, discipline it with exposure, timing, leakage, and direct-defendant scope checks, and compare it with bid-distribution forensics on the same target. Used sequentially, the award-layer ranking reduces the bid-microdata pool for the forensic stage by 83% while recovering 131 of 193 adjudicated cobidders.
JEL Classification: D44 D73 H57 K21 L41
Keywords: screening under incomplete observability cover bidding cartel adjacency award-layer enforcement separating equilibrium
Key Findings¶
83% bid-microdata reduction
Used as a sequential gatekeeper, the award-layer ranking reduces the bid-microdata pool for the forensic stage by 83% while recovering 131 of 193 adjudicated cobidders.
Validation target is legally limited
The screen is validated against adjudication-anchored cobidders: always-loser firms observed alongside direct CADE defendants. It ranks forensic priority, not cartel membership, liability, damages, or legal proof.
Evidence allocation under incomplete observability
Award records are cheap and routinely observed; bid-level records are richer but costly to recover. The paper studies how these layers should be sequenced when enforcement begins before legal proof exists.
Validation architecture
The ranking is disciplined with participation-volume placebos, exposure adjustment over comparable opportunity sets, temporal holdouts, leakage checks, and a direct-defendant scope check.