The Role of Publicity Requirements on Entry and Auctions Outcomes
36 Pages Posted: 16 Dec 2010 Last revised: 2 Mar 2014
Date Written: December 16, 2010
Using a regression discontinuity design, we document the effect of publicizing a procurement auction on entry and outcomes. We collect a large sample of procurement auctions, which by Italian law are assigned different publicity levels on the basis of their reserve price. We find that auctions publicized at the regional level have more bidders and higher winning rebates compared to auctions that are publicized on the notice board of the public administration managing the auction. Regionally-publicized auctions are also more likely to be won by bidders from outside the region, less likely to be won by small companies, and the same firm is more likely to win repeated auctions. Taken together, our results suggest that publicity informs more bidders and reduces search and preparation costs, which encourages entry and “improves” procurement.
Keywords: Publicity, Entry, Auctions, Regression Discontinuity
JEL Classification: D02, D44, C31, L11
Suggested Citation: Suggested Citation