The impact of timing on bidding behavior in procurement auctions of contracts with private costs

D.G. De Silva, G. Kosmopoulou, B. Pagel, R.J.A.P. Peeters

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)321-343
Number of pages23
JournalReview of Industrial Organization
Volume42
Issue number3
DOIs
Publication statusPublished - May 2013

Keywords

  • Multi-unit auctions
  • Procurement auctions
  • SYNERGIES
  • ENTRY
  • EQUILIBRIUM
  • COMPETITION

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