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AN-024: Unified mechanism profile

Intuition (plain-language)

Where does the FL-price association live across a market-concentration × pair-density grid? The biggest mass sits in the Low-HHI × Low-pairs cell (+9.98), and the sign even flips in a high-density cell (−7.92). The earlier temptation was to read this as a cartel signature. The locked stance refuses that: it is descriptive heterogeneity consistent with cover bidding, not proof of a mechanism. Calling a pattern a signature is exactly the overclaim the paper is built to avoid.

Question

How does the unified mechanism profile (HHI × pairs × heterogeneity quadrants) characterize FL cobidders relative to other FLs?

Design

  • Sample: FL14 stratum × HHI × pairs density quadrants.
  • Specification: two-dimensional profile of HHI (low/high) × cobidder-pair density (low/high) × heterogeneity (low/high); conditional cobidder-rate outcomes per cell.
  • Estimation: N = 1,654,401 mechanism-sample observations (\valMechSampleN).

Results

Cell (HHI × pairs × het) Coefficient p N
Low × Low × Low (QLLL) +9.98 5.8e-05 1,327,417
Low × Low × High (QLLH) +2.72 0.179 105,862
Low × High × Low (QLHL) +6.78 0.075 208,731
Low × High × High (QLHH) −7.92 0.002 6,496

Macros: \valMechQLLLCoef, \valMechQLLLP, \valMechQLLLN, \valMechQLLHCoef, \valMechQLHLCoef, \valMechQLHHCoef, plus the matching *P and *N macros.

Auxiliary v8 mechanism statistics (consolidated): \valMechCrowdInUC (+0.184), \valMechBidsPerTender (+0.219), \valMechRegimeSpread (+0.255), \valMechRegimeNeg (−0.056), \valMechBoundaryNeg (−0.160).

Mechanism quadrants: regime boxplot

Figure: regime boxplots of the FL margin across the HHI × pairs quadrants. The Low-Low cell carries the mass; the QLHH cell has the sign-flipping pattern (−7.92, p = 0.002) but small N (6,496) and small effect mass.

Oversight heterogeneity (PBU size quartile interaction)

Figure: FL-margin coefficient by oversight strength (PBU size quartile). Q1 (smallest PBUs, weakest oversight) carries the largest positive coefficient; Q4 (largest PBUs, strongest oversight) carries the smallest — consistent with the "loser-side concentration is more visible where institutional discipline is weaker" reading.

Interpretation

The largest cell by mass is Low-HHI × Low-pairs × Low-heterogeneity (+9.98, N = 1.3M), which is also the diffuse-market baseline. The sign-flipping cell (Low × High × High, −7.92, N = 6,496) is small and specific; it cannot be promoted to "the cartel signature" without overreach.

Locked rule of engagement (mr-frequent rounds 2–4): drop the "assinatura de cartel" framing. The profile is descriptive and shows where the cobidder concentration sits in the cross-section, not a mechanistic identification of cartel structure. The pattern is consistent with loser-side cover-bidding deployment, not diagnostic.

The unified profile sits alongside:

  • the buyer-breadth and operational-footprint pattern (AN-008);
  • the HHI cobidder vs non-cobidder split (AN-009).

Together these three give the cobidder-distinct narrative (H:cobidder-profile-distinct) its descriptive content. None of them is forensic proof; the proof-producing stage remains in the bid layer (AN-010).

Follow-ups

  • Re-estimate within audit-disciplined sample (AN-014).
  • Sub-period stability.
  • Triangulation with the dyadic-permutation pattern (\valDyadicRatio = 5.9; \valDyadicTopTenRatio = 2.0).