Auctions Versus Negotiations: Evidence from Public Procurement in the Italian Healthcare Sector

37 Pages Posted: 5 Apr 2011  

Mercedes Vellez

University of Rome II Tor Vergata, Faculty of Economics, Department of Economics and Institutions (DEI); Center for the Study of State and Society (CEDES)

Date Written: January 5, 2011

Abstract

This paper contributes to the empirical literature on auctions and negotiations. Using healthcare facilities data on procurement contracts, I find evidence that auctions do not yield lower prices than negotiations. This result is robust to specifications tackling quality differences, endogenous participation, and the bilateral and multilateral nature of negotiated procedures. I also find evidence that late payments reduce competition and thus affect firms’ participation choices. A simple test based on Benford’s Law is used to rule out collusion among participants as a possible explanation of the results.

Keywords: Auctions, negotiations, procurement, medical technology, competition, endogeneity, collusion

JEL Classification: H57, C36, I18

Suggested Citation

Vellez, Mercedes, Auctions Versus Negotiations: Evidence from Public Procurement in the Italian Healthcare Sector (January 5, 2011). CEIS Working Paper No. 191. Available at SSRN: https://ssrn.com/abstract=1803297 or http://dx.doi.org/10.2139/ssrn.1803297

Mercedes Vellez (Contact Author)

University of Rome II Tor Vergata, Faculty of Economics, Department of Economics and Institutions (DEI) ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

Center for the Study of State and Society (CEDES) ( email )

Sanchez de Bustamante 27
Buenos Aires, C1173AAA
Argentina

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