Aid and competition in procurement auctions: a case of highway projects
Auctions have been recognised as an important tool for improving economic efficiency. Aid-related procurement systems are no exception to this. Strengthening competition at procurement auctions lowers contract prices and mitigates the heavy indebtedness of developing countries. Auctions are also instrumental in developing local business and fostering good governance. Using data on procurement auctions for Asian Development Bank-assisted highway projects in China, the equilibrium bid function is estimated. The data indicate that two factors may exert different influences on the equilibrium bid. A common expectation that economies of scale in road construction could lower the average cost of constructing relatively long roads encourages firms to bid aggressively, independently of the degree of auction competition. On the other hand, a pro-competitive effect would be observed only as the number of bidders exceeds eight. Copyright © 2007 John Wiley & Sons, Ltd.
Volume (Year): 19 (2007)
Issue (Month): 7 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/5102/home|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Jofre-Bonet, Mireia & Pesendorfer, Martin, 2000. "Bidding behavior in a repeated procurement auction: A summary," European Economic Review, Elsevier, vol. 44(4-6), pages 1006-1020, May.
- Kenneth Hendricks & Harry J. Paarsch, 1995.
"A Survey of Recent Empirical Work Concerning Auctions,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 28(2), pages 403-26, May.
- Hendricks, K. & Paarsch, H.J., 1993. "A Survey of Recent Empirical Work Concerning Auctions," UWO Department of Economics Working Papers 9309, University of Western Ontario, Department of Economics.
- 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.
- Srabana Gupta, 2002. "Competition and collusion in a government procurement auction market," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(1), pages 13-25, March.
- Robert H. Porter & J. Douglas Zona, 1997.
"Ohio School Milk Markets: An Analysis of Bidding,"
NBER Working Papers
6037, National Bureau of Economic Research, Inc.
- Iimi, Atsushi, 2004. "(Anti-)Competitive effect of joint bidding: evidence from ODA procurement auctions," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 416-439, September.
- Klemperer, P., 1999.
"Auction Theory: a Guide to the Literature,"
1999-w12, Economics Group, Nuffield College, University of Oxford.
- Hoffman, Elizabeth & Marsden, James R. & Saidi, Reza, 1991. "Are joint bidding and competitive common value auction markets compatible?--some evidence from offshore oil auctions," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 99-112, March.
- Srabana Gupta, 2001. "The Effect of Bid Rigging on Prices: A Study of the Highway Construction Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 19(4), pages 451-465, December.
- Wagner, Don, 2003. "Aid and trade--an empirical study," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 153-173, June.
- Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014.
"Demand Reduction and Inefficiency in Multi-Unit Auctions,"
Review of Economic Studies,
Oxford University Press, vol. 81(4), pages 1366-1400.
- Lawrence M. Ausubel & Peter Cramton, 1995. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Papers of Peter Cramton 98wpdr, University of Maryland, Department of Economics - Peter Cramton, revised 22 Jul 2002.
- Porter, Robert H & Zona, J Douglas, 1993.
"Detection of Bid Rigging in Procurement Auctions,"
Journal of Political Economy,
University of Chicago Press, vol. 101(3), pages 518-38, June.
- Bulow, Jeremy & Klemperer, Paul, 1996. "Auctions versus Negotiations," American Economic Review, American Economic Association, vol. 86(1), pages 180-94, March.
- Che, Y.K., 1991.
"Design Competition through Multidimensional Auctions,"
9123, Wisconsin Madison - Social Systems.
- Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
- Hendricks, Kenneth & Porter, Robert H, 1992. "Joint Bidding in Federal OCS Auctions," American Economic Review, American Economic Association, vol. 82(2), pages 506-11, May.
- Elmar WOLFSTETTER, 1994.
"Auctions: An Introduction,"
SFB 373 Discussion Papers
1994,13, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Cripps, Martin & Ireland, Norman, 1994. "The Design of Auctions and Tenders with Quality Thresholds: The Symmetric Case," Economic Journal, Royal Economic Society, vol. 104(423), pages 316-26, March.
- Mireia Jofre-Bonet & Martin Pesendorfer, 2003.
"Estimation of a Dynamic Auction Game,"
Econometric Society, vol. 71(5), pages 1443-1489, 09.
- Feinstein, Jonathan S & Block, Michael K & Nold, Frederick C, 1985. "Asymmetric Information and Collusive Behavior in Auction Markets," American Economic Review, American Economic Association, vol. 75(3), pages 441-60, June.
- Rajiv Vohra & In-Koo Cho & Kevin Jewell, 2002. "A simple model of coalitional bidding," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(3), pages 435-457.
- Ken Hendricks & Rob Porter & Guofu Tan, 2000. "Joint Bidding in Federal Offshore Oil and Gas Lease Auctions," Econometric Society World Congress 2000 Contributed Papers 1763, Econometric Society.
- Klemperer, Paul, 1998. "Auctions with almost common values: The 'Wallet Game' and its applications," European Economic Review, Elsevier, vol. 42(3-5), pages 757-769, May.
When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:19:y:2007:i:7:p:997-1015. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.