The Collusion Theory and Research on Collusion in Auctioning off Environmental Hygiene Facilities' Franchise Rights

The collusion theory was raised for the sake of solving the problems in cartels and was further developed in the frame of analyses of entrusting and agency theories. The research on the collusion theory focuses on the collusion in auctioning off franchise rights. In the course of auctioning off environmental hygiene facilities' franchise rights, possibilities of collusion may occur between the administrative department and the bidding enterprises, between all the bidding enterprises and between district and county governments. To prevent the possible collusion in this bidding process, such mechanisms should be designed as the mechanism of public biddings, of franchise business agreements of high incentive strength, of further regulating auction activities by way of intermediary agencies, of giving full play to the restraining role of the punishing terms in the related agreements, and of taking advantage of hi-tech means to strengthen information supervision, etc.