Competitive Bidding On Import Tenders: The Case Of Minor Oilseeds

Auctions and bidding play an important role in agricultural marketing. A common and noteworthy application of auctions and bidding is that of import tendering which is used for both price determination and the allocation of purchases among sellers. In this study we develop a model to evaluate bidding strategies and competition in Egyptian oilseeds imports. Information included the values of bids submitted by each supplier in each tender over the period 1990 to 1993. Results indicate that generally bids could be predicted for all bidders with a relatively high degree of confidence using simple relationships and accessible data. In addition, for each oil tender there appeared to be groups of bidders characterized by differences in their bid functions. The results are particularly interesting for understanding sellers' bidding strategies, competition among rivals, as well as impacts of specific variables on optimal bids and payoffs to sellers. Although this analysis is applied to a set of detailed data, the approach and implications have many applications in other bidding situations in agricultural marketing and contributes to understanding bidding strategies and competition.