The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs
Dakshina G. De Silva
Department of Economics, Lancaster University Management School
University of Oklahoma - Department of Economics
German Institute for Economic Research, (DIW Berlin)
October 18, 2010
We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique proposed by Racine and Li (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 related to synergies and level of bidder participation.
Number of Pages in PDF File: 22
Keywords: Multi-unit auctions, Procurement auctions
JEL Classification: D44, H57working papers series
Date posted: December 12, 2010
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