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Author: Ari Hyytinen
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 85
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Book Description
We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using data on public procurement of cleaning services in Swedish municipalities. In beauty contests, the lowest bid often lost and municipalities left substantial money on the table. The procurement costs were similar before and after the regime change, for two reasons: i) Entry strongly decreases the procurement cost, but did not change. Entry would have decreased with the regime change had the municipalities not adjusted the objects of auctions. ii) Municipalities were less price-sensitive and favored inhouse suppliers in the old regime, leading to more aggressive bidding by others. When the scope for favoritism reduced, these changes balanced each other out. We discuss the implications of our findings for efficiency and welfare.
Author: Parente, Diane H.
Publisher: IGI Global
ISBN: 1599046385
Category : Education
Languages : en
Pages : 402
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Book Description
Offers a systematic approach to the examination of online procurement auctions. Growth in online auctions reinforces the need for understanding the factors important in auctions and the caveats that both researchers and practitioners need to know in order to effectively study and use the auction tool.
Author: Ari Hyytinen
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 85
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Book Description
We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using data on public procurement of cleaning services in Swedish municipalities. In beauty contests, the lowest bid often lost and municipalities left substantial money on the table. The procurement costs were similar before and after the regime change, for two reasons: i) Entry strongly decreases the procurement cost, but did not change. Entry would have decreased with the regime change had the municipalities not adjusted the objects of auctions. ii) Municipalities were less price-sensitive and favored inhouse suppliers in the old regime, leading to more aggressive bidding by others. When the scope for favoritism reduced, these changes balanced each other out. We discuss the implications of our findings for efficiency and welfare.
Author: Maria Monica Wihardja
Publisher:
ISBN:
Category :
Languages : en
Pages : 57
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Book Description
We provide a positive analysis of the equilibrium bidding and bribing strategies with and without corruption in a first-price, sealed-bid, procurement auction with two-dimensional-type bidders. With corruption, we assume that the quality of the bidders are unobservable and non-contractible ex-post. We show examples of equilibrium bids and bribes of N two-dimensional-type bidders in an incomplete information game where the type space is discrete and strategy space is infinite. The equilibrium bid and bribe decrease in the number of bidders. Moreover, we show that in this auction with corruption, quality is randomly chosen, constraining efficiency. In fact, no mechanism can be efficient in this auction. The empirical study suggests that increasing the number of bidders increases the percentage cost efficiency at a decreasing rate and it starts to decrease the percentage cost efficiency after it reaches a certain number of bidders.
Author: Karl-Martin Ehrhart
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The targeted design of auctions has to take behavioral regularities into account. This paper explores whether procurement auction formats can take advantage of bidders' willingness-to-pay-willingness-to-accept disparity. In a laboratory experiment, we compare four different second-price auction formats for procuring a good. The four formats are a sealed-bid auction and three di erent descending-clock auctions. We assume that a bidder's willingness-to-accept exceeds his willingness-to-pay and that, depending on the auction format, a bidder's reference-state shifts such that the bidder's perspective moves from a willingness-to-accept perspective towards a willingness-to-pay perspective, thus inducing aggressive bids. In line with the prediction, auction prices decline across the four formats. In particular, we observe the lowest prices in those two clock auction formats that, at every auction stage, select a bidder as the current leading bidder. We conclude that mechanisms influence the reference state and that auctions that foster reference-state shifts lead to lower payments for the buyer. These results support and generalize findings on sales auctions. However, not all of our findings on procurement auctions mirror findings on sales auctions. Bidders overbid in sealed-bid procurement auctions, which does not mirror the commonly observed overbidding in sealed-bid sales auctions.
Author: Wei-Shiun Chang
Publisher:
ISBN:
Category :
Languages : en
Pages : 103
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Book Description
ABSTRACT: This dissertation examines a variety of mechanism designs adopted by industry to resolve two problematic issues in procurement auctions. Laboratory experiments are utilized to test theoretical predictions. The first essay investigates procurement auctions in a private value environment where procured goods are differentiated by unobservable characteristics. When unobservable characteristics are not taken into account in the selection process, the outcome of a procurement auction likely deviate from the buyer's optimal outcome. Three commonly used mechanisms are considered, namely standard second price auction, performance based contracting and pseudo quality screening. Bidders internalize unobservable characteristics into their bids and systematically transfer the equivalent value of those characteristics to buyers in the procurement auctions with performance based contracting. Subjects bid at their costs as predicted in the procurement auctions with pseudo quality screening and the price only mechanisms while they bid closely to their net costs in the auction with performance based contract. Experimental data has shown that the performance based contract mechanism generates higher buyer revenue than other two mechanisms do. The second essay is a test of a mechanism, average bid, used to resolve the winner's curse in a common value environment. Bidders' behavior in this mechanism is not significantly different from that in a conventional mechanism, low price. Consequently, price in the average bid mechanism is driven up and there is a reduction in the frequency of negative earnings and bankruptcy.
Author: Hidenori Takahashi
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: Nicola Dimitri
Publisher: Cambridge University Press
ISBN: 1139459252
Category : Business & Economics
Languages : en
Pages : 529
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Book Description
How can organizations ensure that they can get best value for money in their procurement decisions? How can they stimulate innovations from their dedicated suppliers? With contributions from leading academics and professionals, this 2006 handbook offers expert guidance on the fundamental aspects of successful procurement design and management in firms, public administrations, and international institutions. The issues addressed include the management of dynamic procurement; the handling of procurement risk; the architecture of purchasing systems; the structure of incentives in procurement contracts; methods to increase suppliers' participation in procurement contests and e-procurement platforms; how to minimize the risk of collusion and of corruption; pricing and reputation mechanisms in e-procurement platforms; and how procurement can enhance innovation. Inspired by frontier research, it provides practical recommendations to managers, engineers and lawyers engaged in private and public procurement design.
Author: Jun Nakabayashi
Publisher:
ISBN:
Category : Endogenous growth (Economics)
Languages : en
Pages : 144
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Book Description
Abstract: Spending approximately 10 percent of the gross domestic product (GDP), governments are the biggest buyer of goods and services for many countries. Sound public procurement policies and practices are essential not only to good governance, but also to a strong and stable economy. On the other hand, due to the fact that more than 99 percent of all businesses are small in most of the countries, the involvement of small businesses are vital for the governments seeking to establish competition, innovation and value for money in the delivery of public goods and services. In fact, small businesses are likely to be disadvantage in production costs and lack in knowledge of available contract opportunities. Moreover, since it naturally would fit better to the small businesses, many of them serve to government contracts as subcontractor. In this thesis, I analyze public procurement auctions both empirically and theoretically, focusing on the role and impact of small businesses in government procurement market.
Author: Francesco Decarolis
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This article contrasts two auction formats often used in public procurement: first price auctions with ex post screening of bid responsiveness and average bid auctions (ABAs), in which the bidder closest to the average bid wins. The equilibrium analysis reveals that their ranking is ambiguous in terms of revenues, but the ABA is typically less efficient. Using a data set of Italian public procurement auctions run alternately under the two formats, a structural model of bidding is estimated for the subsample of first price auctions and used to quantify the efficiency loss under counterfactual ABAs.
Author: In-Gyu Kim
Publisher:
ISBN:
Category : Auctions
Languages : en
Pages : 252
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Book Description
