High and Low Bids in Tenders: Strategic Pricing and Other Bidding Behaviour in Public Tenders of Passenger Railway Services

34 Pages Posted: 1 Jun 2007

See all articles by Gunnar Alexandersson

Gunnar Alexandersson

Stockholm School of Economics - Department of Marketing & Strategy

Staffan Hultén

Stockholm School of Economics - Department of Marketing & Strategy

Abstract

An important component in the deregulation of the public sector in the European Union is public procurement of services and products. This article studies the bidding behaviour of firms participating in public tenders of passenger railway services in Sweden. In a theoretical part of the article we discuss the various possible reasons behind high and low bids in tenders, linked to a discussion on pricing strategies and continuous and discontinuous economies of scale regarding costs of production. Detailed data on bids and bidders in Swedish tenders of railway services are then analyzed. 37 tenders taking place between 1989 and 2005 are included.

Suggested Citation

Alexandersson, Gunnar and Hultén, Staffan, High and Low Bids in Tenders: Strategic Pricing and Other Bidding Behaviour in Public Tenders of Passenger Railway Services. Annals of Public and Cooperative Economics, Vol. 78, No. 2, pp. 161-194, June 2007, Available at SSRN: https://ssrn.com/abstract=989068 or http://dx.doi.org/10.1111/j.1467-8292.2007.00331.x

Gunnar Alexandersson (Contact Author)

Stockholm School of Economics - Department of Marketing & Strategy ( email )

P.O. Box 6501
Stockholm
Sweden
+46-8-736 9557 (Phone)

HOME PAGE: http://www.hhs.se/Faculty/showperson.htm?personid=5

Staffan Hultén

Stockholm School of Economics - Department of Marketing & Strategy ( email )

P.O. Box 6501
Stockholm
Sweden
+46-8-736 9533 (Phone)

HOME PAGE: http://www.hhs.se/Faculty/showperson.htm?personid=182

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