Stochastic Synergies in Sequential Auctions

42 Pages Posted: 12 Nov 2004

See all articles by Dakshina G. De Silva

Dakshina G. De Silva

Department of Economics, Lancaster University Management School

Thomas D. Jeitschko

Michigan State University - Department of Economics

Georgia Kosmopoulou

University of Oklahoma - Department of Economics

Date Written: 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 Classification: D44

Suggested Citation

De Silva, Dakshina G. and Jeitschko, Thomas D. and Kosmopoulou, Georgia, Stochastic Synergies in Sequential Auctions (November 2004). Available at SSRN: https://ssrn.com/abstract=617446 or http://dx.doi.org/10.2139/ssrn.617446

Dakshina G. De Silva

Department of Economics, Lancaster University Management School ( email )

Lancaster LA1 4YX
United Kingdom

Thomas D. Jeitschko (Contact Author)

Michigan State University - Department of Economics ( email )

110 Marshall-Adams Hall
East Lansing, MI 48824
United States
517-355-8302 (Phone)
517-432-1068 (Fax)

HOME PAGE: http://www.msu.edu/~jeitschk/

Georgia Kosmopoulou

University of Oklahoma - Department of Economics ( email )

633 Elm Avenue
306 Ellison Hall
Norman, OK 73019
United States
405-325-3083 (Phone)
405-325-5842 (Fax)

HOME PAGE: http://georgiakosmopoulou.oucreate.com/

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