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Analysis of Entrant and Incumbent Bidding in Public Procurement Auctions

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  • Bedri Kamil Onur Tas

Abstract

We empirically investigate differences in cost-effectiveness of public procurement auctions that are won by entrants and incumbents. We use a unique data set that covers all Turkish public procurement auctions for the years 2004 to 2010. We find that procurement prices of auctions won by entrants are significantly lower. More than half of the entrants cannot survive in the public procurement market and cannot win more than one auction. Our results indicate that policymakers should cultivate competition and promote entry in public procurement auctions.

Suggested Citation

  • Bedri Kamil Onur Tas, 2019. "Analysis of Entrant and Incumbent Bidding in Public Procurement Auctions," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 75(2), pages 187-204.
    • Handle: RePEc:mhr:finarc:urn:doi:10.1628/fa-2019-0002
    DOI: 10.1628/fa-2019-0002
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    More about this item

    Keywords

    public procurement auctions; competition; cost effectiveness; entrants; survival;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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