Bid Costs and the (In)efficiency of Public Procurement Auctions


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Bid Costs and the (In)efficiency of Public Procurement Auctions

Show simple item record Blomgren-Hansen, Niels 2019-03-06T08:03:34Z 2019-03-06T08:03:34Z 2019-03-06
dc.description.abstract The paper analyzes the excess entry hypothesis for sealed-bid first-price public procurement auctions. The hypothesis is proved analytically for any feasible combination of bid preparation cost and bid evaluation cost when the bidders face a rectangular cost density function and confirmed in numerical simulations based on a family of flexible cost density functions. The excess entry hypothesis implies that the procurer may reduce both his own cost and the social cost by imposing a positive fee on the bids. Sequential search is a superior strategy to a public procurement auction whether or not the procurer imposes an optimal fee on the bids. en_US
dc.format.extent 22 en_US
dc.language eng en_US
dc.relation.ispartofseries Working Paper;1-2019
dc.subject.other Excess entry en_US
dc.subject.other Public procurement auctions en_US
dc.subject.other Optimal fee en_US
dc.subject.other Sequential Search en_US
dc.title Bid Costs and the (In)efficiency of Public Procurement Auctions en_US
dc.type wp en_US
dc.accessionstatus modt19mar06 soma en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Økonomisk Institut en_US
dc.contributor.departmentshort ECON en_US
dc.contributor.departmentuk Department of Economics en_US
dc.contributor.departmentukshort ECON en_US Frederiksberg en_US
dc.publisher.year 2019 en_US

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