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Stochastic Synergies in Sequential Auctions
Dakshina G. De Silva Texas Tech University - Department of Economics Thomas D. Jeitschko Michigan State University - Department of Economics Georgia Kosmopoulou University of Oklahoma - Department of Economics November 2004 Abstract: We consider sequential construction contracts in which bidders may benefit from one auction to the next due to synergistic tasks across the projects auctioned. Theoretical considerations indicate that winners in the former auctions are more likely to participate in latter auctions. Moreover, conditional on participation, past winners place lower bids, on average, and are so more likely to win in later auctions. We present evidence in support of these predictions using sequential construction auctions conducted by the Oklahoma Department of Transportation.
Keywords: Sequential auctions, synergies, multi-unit auctions, procurement auctions JEL Classifications: D44 Working Paper SeriesDate posted: November 12, 2004 ; Last revised: November 12, 2004Suggested CitationContact Information
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