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The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs

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  • Dakshina De Silva
  • Georgia Kosmopoulou
  • Beatrice Pagel
  • Ronald Peeters

Abstract

We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique that was proposed by Racine and Li (J Econom 119(1):99–130, 2004 ) we find that bidding is more aggressive in a sequential multi-round setting than in a simultaneous single-round format. We explore potential causes for the bidding difference across formats that are related to synergies and the level of bidder participation. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Dakshina De Silva & Georgia Kosmopoulou & Beatrice Pagel & Ronald Peeters, 2013. "The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 321-343, May.
    • Handle: RePEc:kap:revind:v:42:y:2013:i:3:p:321-343
    DOI: 10.1007/s11151-012-9354-8
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    Cited by:

    1. Andrey V. Tkachenko & Andrei A. Yakovlev & Olga A. Demidova & Irina O. Volmenskikh, 2014. "The Effects Of Regulatory Reforms On Public Procurement: The Case Of A National University In Russia," HSE Working papers WP BRP 19/PA/2014, National Research University Higher School of Economics.
    2. Andrey Tkachenko & Daniil Esaulov, 2018. "The Role Of Governors In Public Procurement," HSE Working papers WP BRP 19/PSP/2018, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Multi-unit auctions; Procurement auctions; D44; H57;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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