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Incumbent and Entrant Bidding in Scoring Rule Auctions: A Study on Italian Canteen Services

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  • Camboni Riccardo
  • Valbonesi Paola

    (Department of Economics and Management, University of Padova, Via del Santo 33, Padova, 35123, Italy)

Abstract

We empirically investigate incumbents’ and entrants’ bids on an original dataset of 192 scoring rule auctions for canteen services in Italy. Our findings show that winning rebates are lower (i.e., prices paid by the public buyer are higher) when the contract is awarded to the incumbent supplier. This result is not explained by the observable characteristics of the auction or the service awarded. We develop a simple theoretical model showing that the result is consistent with a setting in which the buyer exploits specific information on the incumbent supplier’s production cost.

Suggested Citation

  • Camboni Riccardo & Valbonesi Paola, 2021. "Incumbent and Entrant Bidding in Scoring Rule Auctions: A Study on Italian Canteen Services," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 1-43, January.
    • Handle: RePEc:bpj:bejeap:v:21:y:2021:i:1:p:1-43:n:3
    DOI: 10.1515/bejeap-2019-0146
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    Cited by:

    1. Sümeyra Atmaca & Riccardo Camboni & Elena Podkolzina & Koen Schoors & Paola Valbonesi, 2022. "Setting reserve prices in repeated procurement auctions," "Marco Fanno" Working Papers 0289, Dipartimento di Scienze Economiche "Marco Fanno".

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    More about this item

    Keywords

    scoring rule auctions; procurement; incumbent and entrant; favoritism;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy

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