# Prof. Kei Kawai's research on collusion among Japanese construction firms is highlighted

1 Faculty News July 12, 2014 ![The Economist logo](/sites/default/files/styles/246w/public/assets/images/uat_025662.jpg?itok=1_MW1PTy)>

Excerpt from [The Economist](http://www.economist.com/news/finance-and-economics/21606837-risks-cartels-and-collusion-pose-auctions-competition-hammered) -- "A paper by [Kei Kawai](http://www.stern.nyu.edu/faculty/bio/kei-kawai) of New York University’s Stern School of Business and Jun Nakabayashi of Tohoku University examines Japanese public building projects. They collected data on over 40,000 tenders from 2003-06 worth $42 billion (around 3% of national tax revenue). The Japanese government uses a first-price sealed-bid auction: builders write down their best price, and the lowest bid wins the work. If none beats a reserve price that is known only to the auctioneer, the procedure is repeated until a bid beats the reserve."

[Read more](http://www.economist.com/news/finance-and-economics/21606837-risks-cartels-and-collusion-pose-auctions-competition-hammered)