Competition for Local Public Services with Learning-by-doing and Transferability
Many local governments allow competition between public and private rms for provision of local public services in order to reduce procurement cost. Competition is usually introduced through competitive tendering for concession contracts. We show that in a symmetric competition between public and private rms with learning-by-doing, private rm's ability to transfer learning among concessions may reduce consumer's welfare. The model provides testable implications which are consistent with the empirical evidence: little competition for concessions, retail prices higher under private operation than under public one, and subsidies and retail prices to service providers increased over time. In addition, consumers' gains from switching to private ownership are higher in industries where private rms have low-ability to transfer learning among di erent concessions.
|Date of creation:||Feb 2011|
|Contact details of provider:|| Postal: Avenida dos Bandeirantes, 3900 Ribeirão Preto - SP|
Phone: (016) 633-5617
Fax: (016) 633-6133
Web page: http://www.cpq.fearp.usp.br/
More information through EDIRC
References listed on IDEAS
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.:
- David E. M. Sappington & Joseph E. Stiglitz, 1987.
"Privatization, information and incentives,"
Journal of Policy Analysis and Management,
John Wiley & Sons, Ltd., vol. 6(4), pages 567-585.
- repec:dau:papers:123456789/4073 is not listed on IDEAS
- Matthew Ellman, 2006. "The optimal length of contracts with application to outsourcing," Economics Working Papers 965, Department of Economics and Business, Universitat Pompeu Fabra.
- Arozamena, Leandro & Cantillon, Estelle, 2001.
"Investment Incentives in Procurement Auctions,"
CEPR Discussion Papers
2676, C.E.P.R. Discussion Papers.
- Leandro Arozamena & Estelle Cantillon, 2000. "Investment Incentives in Procurement Auctions," Cowles Foundation Discussion Papers 1276, Cowles Foundation for Research in Economics, Yale University.
- Leandro Arozamena & Estelle Cantillon, 2004. "Investment incentives in procurement auctions," ULB Institutional Repository 2013/9005, ULB -- Universite Libre de Bruxelles.
- Laffont, Jean-Jacques & Tirole, Jean, 1991. "Auction design and favoritism," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 9-42, March.
- Chong Eshien & Freddy Huet, 2009. "Yardstick competition, franchise bidding and firms' incentives to collude," Post-Print halshs-00479475, HAL.
- Jean Tirole & Jean-Jaques Laffont, 1987.
"Repeated Auctions of Incentive Contracts, Investment and Bidding Parity With an Application to Takeovers,"
463, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jean-Jacques Laffont & Jean Tirole, 1988. "Repeated Auctions of Incentive Contracts, Investment, and Bidding Parity with an Application to Takeovers," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 516-537, Winter.
- Laffont, J. J. & Tirole, J., 1988. "Repeated Auctions of Incentive Contracts, Investment and Bidding Parity with an Application to Takeovers," Working Papers 675, California Institute of Technology, Division of the Humanities and Social Sciences.
- Jun Nakabayashi, 2010.
"Small Business Set-asides in Procurement Auctions: An Empirical Analysis,"
Global COE Hi-Stat Discussion Paper Series
gd09-126, Institute of Economic Research, Hitotsubashi University.
- Nakabayashi, Jun, 2013. "Small business set-asides in procurement auctions: An empirical analysis," Journal of Public Economics, Elsevier, vol. 100(C), pages 28-44.
- Jun Nakabayashi, 2009. "Small Business Set-asides in Procurement Auctions: An Empirical Analysis," Tsukuba Economics Working Papers 2009-005, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba, revised Nov 2009.
- AndréS GóMez-Lobo & Stefan Szymanski, 2001. "A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 105-113, February.
- Drew Fudenberg & Jean Tirole, 1983. "Learning-by-Doing and Market Performance," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 522-530, Autumn.
- Vagstad, Steinar, 1995. "Promoting fair competition in public procurement," Journal of Public Economics, Elsevier, vol. 58(2), pages 283-307, October.
- Naegelen, Florence & Mougeot, Michel, 1998. "Discriminatory public procurement policy and cost reduction incentives," Journal of Public Economics, Elsevier, vol. 67(3), pages 349-367, March.
- Andrei Shleifer & Robert W. Vishny, 1994. "Politicians and Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 995-1025.
- Cécile Aubert & Philippe Bontems & François Salanié, 2006.
"Le Renouvellement Périodique Des Contrats De Concession: Le Cas Des Services De L'Eau,"
Annals of Public and Cooperative Economics,
Wiley Blackwell, vol. 77(4), pages 495-520, December.
- Cécile Aubert & Philippe Bontems & François Salanie, 2006. "Le renouvellement périodique des contrats de concession : le cas des services de l'eau," Post-Print hal-00151698, HAL.
- David Martimort & Philippe De Donder & Etienne Billette de Villemeur, 2005.
"An Incomplete Contract Perspective on Public Good Provision,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 19(2), pages 149-180, 04.
- Martimort, David & De Donder, Philippe & de Villemeur, Étienne, 2003. "An Incomplete Contract Perspective on Public Good Provision," IDEI Working Papers 212, Institut d'Économie Industrielle (IDEI), Toulouse.
- Marc Dudey, 1992. "Dynamic Edgeworth-Bertrand Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1461-1477.
- Eshien Chong & Freddy Huet, 2009. "Yardstick Competition, Franchise Bidding and Firms’ Incentives to Collude," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 149-169, September.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743.
- Marion, Justin, 2007. "Are bid preferences benign? The effect of small business subsidies in highway procurement auctions," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1591-1624, August.
- McAfee, R. Preston & McMillan, John, 1989. "Government procurement and international trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 291-308, May.
- Stefan Szymanski, 1996. "The impact of compulsory competitive tendering on refuse collection services," Fiscal Studies, Institute for Fiscal Studies, vol. 17(3), pages 1-19, August.
When requesting a correction, please mention this item's handle: RePEc:fea:wpaper:06-2011. 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: (Bruno Vizona Liberato)
If references are entirely missing, you can add them using this form.