We study the effect on cost overruns of two different auction formats, the first price sealed bid and the average bid, conditional on whether entry is open or restricted. The first price format awards the contract to the lowest bid, while the average bid format awards the contract to the bid...

We study the effect on cost overruns of auction formats (average bid as opposed to …first price rule) conditional on the entry mechanisms (open as opposed to restricted participation). The dataset is a panel of auctions held in the Italian Veneto region between 2004 and 2006. It includes small...

We study the optimal procurement mechanism when contract breach and abandoning a project may be efficient, either because of completion costs higher than anticipated or because of new and more lucrative opportunities for the contractor. When contractors have private information about their...