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Snow removal auctions in Montreal: costs, informational rents, and procurement management

  • Véronique Flambard
  • Pierre Lasserre
  • Pierre Mohnen

Using semi-parametric and non-parametric estimation techniques, we infer cost distributions and informational rents from 457 bids for snow removal contracts offered for tender by the City of Montreal between 1990 and 1998. Bids and costs have decreased over the sample period, while rents remained relatively constant. The City deserves credit for these results, as it has succeeded in exploiting economies of scale and triggering innovations while maintaining competition. Further, it has been successful in adjusting its reserve prices to keep up with the decreasing cost of snow removal.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 40 (2007)
Issue (Month): 1 (February)
Pages: 245-277

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Handle: RePEc:cje:issued:v:40:y:2007:i:1:p:245-277
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  1. Elyakime, Bernard & Laffont, Jean-Jacques & Loisel, Patrice & Vuong, Quang, 1993. "First-Price Sealed-Bid Auctions with Secret Reservation Prices," IDEI Working Papers 27, Institut d'Économie Industrielle (IDEI), Toulouse.
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  16. Paarsch, Harry J., 1992. "Deciding between the common and private value paradigms in empirical models of auctions," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 191-215.
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