We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique that was proposed by Racine and Li (J Econom 119(1):99-130, 2004) we find that bidding is more aggressive in a sequential multi-round setting than in a simultaneous single-round format. We explore potential causes for the bidding difference across formats that are related to synergies and the level of bidder participation.
- Multi-unit auctions
- Procurement auctions
De Silva, D. G., Kosmopoulou, G., Pagel, B., & Peeters, R. J. A. P. (2013). The impact of timing on bidding behavior in procurement auctions of contracts with private costs. Review of Industrial Organization, 42(3), 321-343. https://doi.org/10.1007/s11151-012-9354-8