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Does Competition for the Field Improve Cost Efficiency? Evidence from the London Bus Tendering Model

Author

Listed:
  • Miguel Amaral

    (ATOM – U. of Paris I Sorbonne)

  • Stéphane Saussier

    (ADIS – U. of Paris 11 & ATOM – U. of Paris I Sorbonne)

  • Anne Yvrande-Billon

    () (ATOM – U. of Paris I Sorbonne)

Abstract

In this paper we investigate the relationship between auctions’ results and the number of bidders for local transportation contracts in London. Using an original database concerning 294 local transportation routes we find that a higher number of bidders is associated with a lower cost of service. This finding, in addition of being one of the first empirical test of a crucial and understudied theoretical issue has important policy implications, especially for countries in which bids are organized such that only few bidders are allowed to answer (e.g. France).

Suggested Citation

  • Miguel Amaral & Stéphane Saussier & Anne Yvrande-Billon, 2006. "Does Competition for the Field Improve Cost Efficiency? Evidence from the London Bus Tendering Model," Working Papers 2006-14, Center for Network Industries and Infrastructure (CNI).
  • Handle: RePEc:cni:wpaper:2006-14
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    File URL: http://www.cni.tu-berlin.de/fileadmin/documents/RePEc/cni/working_paper/yvrande-billon_2006_does-competition-for-the-field-improve-cost-efficiency-cni_wp_no_2006-14.pdf
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    Cited by:

    1. Julie Brux & Claudine Desrieux, 2014. "To allot or not to allot public services? An incomplete contract approach," European Journal of Law and Economics, Springer, vol. 37(3), pages 455-476, June.
    2. Filippini, M. & Koller, M. & Masiero, G., 2015. "Competitive tendering versus performance-based negotiation in Swiss public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 158-168.

    More about this item

    Keywords

    public services; transportation; franchise bidding; public-private partnerships; winner’s curse; auctions;

    JEL classification:

    • H0 - Public Economics - - General
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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