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Multidimensional Auctions for Public Energy Efficiency Projects: Evidence from Japanese Esco Market

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  • Atsushi Iimi

    (The World Bank Group)

Abstract

Competitive bidding is an important policy tool for governments to procure goods and services at the lowest possible cost in the market. Under the traditional public procurement system, however, it is difficult to purchase a highly customized object, such as energy efficiency services, because not only prices but also other nonmonetary aspects need to be taken into account. Multidimensional auctions are useful in such cases. The paper examines the cluster of characteristics of the winning bids of multidimensional auctions for public energy service company (ESCO) projects in Japan. As theory predicts, it is found that the competition effect is significant. Other institutional aspects—such as preannouncement of an energy savings target—are also found important to promote energy efficiency. The results also indicate that the public sector should absorb the regulatory and institutional risks that are related to ESCO projects.

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  • Atsushi Iimi, 2016. "Multidimensional Auctions for Public Energy Efficiency Projects: Evidence from Japanese Esco Market," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(3), pages 491-514, November.
    • Handle: RePEc:kap:revind:v:49:y:2016:i:3:d:10.1007_s11151-016-9510-7
    DOI: 10.1007/s11151-016-9510-7
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    Cited by:

    1. Riccardo Camboni Marchi Adani, 2018. "Procuring price and quality using scoring auctions: where do we stand?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 17-36, March.
    2. NAKABAYASHI Jun & HIROSE Yohsuke, 2016. "Structural Estimation of the Scoring Auction Model," Discussion papers 16008, Research Institute of Economy, Trade and Industry (RIETI).
    3. Zheng, Saina & Zhai, Haibo & Hsu, Shu-Chien & Armanios, Daniel Erian, 2024. "Uneven distribution in energy conservation services through performance contracts in China," Energy Policy, Elsevier, vol. 187(C).
    4. Jonathan Sinton & Joeri de Wit, 2014. "Exploiting Market-Based Mechanisms to Meet Utilities' Energy Efficiency Obligations," World Bank Publications - Reports 18678, The World Bank Group.
    5. Hesselink, Laurens X.W. & Chappin, Emile J.L., 2019. "Adoption of energy efficient technologies by households – Barriers, policies and agent-based modelling studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 99(C), pages 29-41.
    6. Xiaoli Wang & Yun Liu & Yanbing Ju, 2018. "Sustainable Public Procurement Policies on Promoting Scientific and Technological Innovation in China: Comparisons with the U.S., the UK, Japan, Germany, France, and South Korea," Sustainability, MDPI, vol. 10(7), pages 1-27, June.

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    More about this item

    Keywords

    Multidimensional auction; Energy efficiency; Risk sharing;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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