Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management
AbstractUsing nonparametric estimation techniques adapted from Guerre et al. , we infer cost distributions and informational rents, from 666 snow removal contracts offered for tender by the City of Montreal. Our results are compatible with standard received theory of competitive auctions: there is a positive correlation between costs and bids; rents increase with the variance of costs and decrease with the number of bidders. Bids and costs have decreased over the sample period, while informational rents remained stable. The City deserves credit for these results, as it has succeeded in exploiting economies of scale while maintaining competition.
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Bibliographic InfoPaper provided by Université du Québec à Montréal, Département des sciences économiques in its series Cahiers de recherche du Département des sciences économiques, UQAM with number 20-05.
Date of creation: Feb 2001
Date of revision:
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Procurement auction; nonparametric estimation; informational rents; task design; municipal contracts;
Other versions of this item:
- Véronique Flambard & Pierre Lasserre & Pierre Mohnen, 2007. "Snow removal auctions in Montreal: costs, informational rents, and procurement management," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 245-277, February.
- Véronique Flambard & Pierre Lasserre & Pierre Mohnen, 2004. "Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management," CIRANO Working Papers 2004s-59, CIRANO.
- Flambard,Véronique & Lasserre,Pierre & Mohnen ,Pierre, 2004. "Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management," Research Memorandum 023, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- H40 - Public Economics - - Publicly Provided Goods - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-14 (All new papers)
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