Do Combinatorial Procurement Auctions Lower Cost? - An Empirical Analysis of Public Procurement of Multiple Contracts
AbstractCombinatorial procurement auctions enable suppliers to pass their potential cost synergies on to the procuring entity and may therefore lead to lower costs and enhance efficiency. However, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Using data from standard and combinatorial procurement auctions, we find that bids on individual contracts in simultaneous standard auctions without the option to submit package bids are significantly lower than the corresponding stand-alone bids in combinatorial auctions. Further, no significant difference in procurer’s cost as explained by auction format is found.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 825.
Length: 22 pages
Date of creation: 20 Apr 2011
Date of revision:
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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
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Combinatorial procurement auctions; Contract bidding;
Other versions of this item:
- Lunander, Anders & Lundberg, Sofia, 2009. "Do Combinatorial Procurement Auctions Lower Cost? - An Empirical Analysis of Public Procurement of Multiple Contracts," UmeÃ¥ Economic Studies 776, Umeå University, Department of Economics, revised 16 Sep 2009.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
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