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Resident Bid Preference, Affiliation, and Procurement Competition: Evidence from New Mexico

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  • Benjamin V. Rosa

Abstract

In public procurement auctions, governments routinely offer preferences to qualified firms in the form of bid discounts. Previous studies on bid discounting do not account for affiliation – a form of cost dependence between bidders that is likely to occur in a public procurement environment. Utilizing data from the New Mexico Department of Transportation’s Resident Preference Program, I develop and estimate an empirical model of firm bidding and entry that allows for affiliation in firms’ project costs. I find evidence of affiliation and show how it changes preference auction outcomes.

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  • Benjamin V. Rosa, 2019. "Resident Bid Preference, Affiliation, and Procurement Competition: Evidence from New Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 67(2), pages 161-208, June.
    • Handle: RePEc:bla:jindec:v:67:y:2019:i:2:p:161-208
    DOI: 10.1111/joie.12202
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    Cited by:

    1. Rodrigo Carril & Audrey Guo, 2023. "The Impact of Preference Programs in Public Procurement: Evidence from Veteran Set-Asides," Working Papers 1417, Barcelona School of Economics.
    2. Rosa, Benjamin, 2016. "Subcontracting Requirements and the Cost of Government Procurement," MPRA Paper 77392, University Library of Munich, Germany.
    3. Rosa, Benjamin V., 2022. "Bid credits in simultaneous ascending auctions," Games and Economic Behavior, Elsevier, vol. 132(C), pages 189-203.
    4. De Silva, Dakshina G. & Hubbard, Timothy P. & Kosmopoulou, Georgia, 2020. "An evaluation of a bidder training program," International Journal of Industrial Organization, Elsevier, vol. 72(C).

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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