The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs
22 Pages Posted: 12 Dec 2010
Date Written: 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.
Keywords: Multi-unit auctions, Procurement auctions
JEL Classification: D44, H57
Suggested Citation: Suggested Citation