Synergies in Recurring Procurement Auctions: An Empirical Investigation
Posted: 23 Dec 2004
This paper examines the impact of synergies on bidder behavior in recurring road construction procurement auctions. The study reveals that projects are spatially correlated. When bidders with potential synergies participate, the results indicate that their probability of bidding and winning increases and that they bid more aggressively. Finally, the study shows that a firm that is capacity unconstrained will bid more aggressively than one that is capacity constrained.
Keywords: Auctions, Synergies
JEL Classification: D44
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